Saturday 29 / November / 2025
Muscat: Oman’s economic growth remained strong in 2024 and the first half of 2025, supported by expansions in manufacturing, wholesale and retail, logistics, construction, and agriculture and fishing, while hydrocarbon GDP contracted due to Opec+ production curbs.
This was stated by the IMF expert mission in its concluding statement of its meetings on Thursday. The just conclude meetings of the International Monetary Fund (IMF) experts mission to the Sultanate of Oman was within the framework of the 2025 Article IV Consultations.
During the meetings, discussions were held with a number of officials in government units and representatives from the private and banking sectors regarding the latest macroeconomic developments and expected future outlook, as well as fiscal and monetary policies, financial sector development, and structural reforms.
The IMF expert mission statement indicated that inflation in Oman eased to 0.6 percent in 2024 and remained contained at 0.9 percent during January-October 2025. The fiscal balance posted a surplus of 3.3 percent of GDP in 2024, while the current account also recorded a surplus of 3.2 percent of GDP. Government debt stood at 36.1 percent of GDP by September 2025.
The economic outlook remains favourable, as per the statement. The statement further added that growth is projected to strengthen over 2025–26 as oil production cuts unwind and non-hydrocarbon activity continues to expand. Inflation is expected to stay low and converge toward 2 percent over the medium term.
Fiscal and external positions are anticipated to remain solid, with fiscal surpluses projected to persist. The current account is projected to shift into deficit in 2025–27, driven mainly by lower oil prices, before gradually returning to surplus as oil production recovers toward potential capacity and non-hydrocarbon exports strengthen.
The non-hydrocarbon primary deficit is estimated to have narrowed by 2 percent of non-hydrocarbon GDP in 2025, supported by expenditure restraint and improved non-hydrocarbon revenue collection.
"Continued progress on tax administration modernisation, rolling out VAT e-invoicing, and introducing a personal income tax on high-income earners in 2028 will be central to reinforcing fiscal sustainability. Further fiscal reforms—including rationalising non-essential current spending, phasing out non targeted energy subsidies, while protecting the most vulnerable, strengthening the medium-term fiscal framework, and developing a sovereign asset–liability management framework—will be essential to entrench fiscal sustainability and enhance policy credibility.”
The steadfast implementation of the Monetary Policy Enhancement Project—including introducing an Omani Rial standing deposit facility and operationalising the interest rate corridor—, and gradually transitioning to a full-fledged treasury single account will strengthen monetary policy transmission.
Further, the statement indicated that continued efforts to strengthen the macro-prudential framework, enhance granularity of regulatory data and supervisory capacity, improve the financial safety net and crisis management, and deepen capital markets to diversify financing sources for the private sector will be essential to safeguarding financial stability and fostering financial sector development.
The statement pointed out that the 11th Development Plan presents an important opportunity to accelerate economic diversification, boost productivity, and create more private-sector jobs for Omanis. Priorities include advancing labor market reforms, improving the business environment, strengthening market competition to increase private sector participation in the economy, enhancing SME support, deepening trade integration, pursuing renewables initiatives, and scaling up the digital transformation—including AI readiness.
