Monday 02 / February / 2026
Muscat: The World Bank has credited the Sultanate of Oman’s fiscal consolidation and public finance reform measures for rapidly putting back on rails the domestic economy after the turmoil unleashed by the global downturn and the COVID-19 pandemic.
The Washington DC-based international financial institution noted in particular the contribution made by the Medium Term Fiscal Plan (MTFP) – the centrepiece of the government’s fiscal reform programme – for strengthening Oman’s overall economic position and growth outlook.
“We support the authorities’ reform efforts under the MTFP, with the objective of transitioning the economy towards stronger and more sustainable growth,” said Issam Abousleiman, Country Director of the GCC Countries, Middle East and North Africa at The World Bank.
“The MTFP not only aims to achieve fiscal sustainability and macroeconomic stability but focuses on other key reform areas such as supporting economic growth and building a comprehensive social safety net. These reforms should strengthen the pace of economic growth by improving the business environment, creating a flexible and agile labour market, and attracting domestic and foreign investments.”
In an exclusive interview with Times of Oman, Abousleiman underlined the continuing role of the hydrocarbon and non-hydrocarbon sectors as the “driving force” of the economy.
The hydrocarbon sector, he said, is projected to grow by over 8 percent in 2022 and remain strong during 2023-24.
The non-oil economy is anticipated to continue its recovery trajectory and grow by 3 percent annually during the period 2022-24, supported by stronger exports and logistics sectors, increased industrial capacity from renewable energy and resurgence in tourism.
“High oil prices forecast, accompanied with steadfast implementation of the MTFP would materially improve the outlook and support advancing climate change agenda, digitalisation and spur a strong, inclusive and green recovery,” he noted.
Importantly, the windfall from higher hydrocarbon prices, supported by fiscal adjustment measures, has significantly improved fiscal and external balances, the World Bank official said. Both balances turned into surplus in 2022 (5.7 and 6.4 percent of GDP, respectively) and are expected to continue in surplus in the medium term leading to a sharp fall in the debt-to-GDP ratio, he further pointed out.
Commenting on the slew of upgrades announced recently by various international rating agencies, Abousleiman said they reflect significant improvements in Oman’s fiscal metrics, a lessening of external financing pressures and ongoing efforts to reform public finances, and a sharp fall in government debt-to-GDP ratio.
“This bodes well for the Sultanate’s borrowing capacity, and the government indeed raised US $4 billion in debt from regional and international lenders last April to be used for general sovereign financing and refinancing, according to data compiled by Bloomberg,” he said.
As mentioned earlier, the economy is projected to continue its recovery and strengthen over the medium-term driven by robust energy prices, expansion of oil and gas production, and wide-ranging structural reforms.
Accordingly, growth will be driven by both hydrocarbon and non-hydrocarbon sectors, which are expected to grow by over 5 percent and 3 percent over 2022-24, respectively.
Expanding non-oil revenue have bolstered economic growth supported by the government’s structural reforms, new taxes, and diversification initiatives as per the new five-year plan (2021-25), under the Vision 2040 strategy.
In addition, the reforms aimed at increasing the share of the private sector in the economy will have another positive spillover for the non-oil economy.
