Budget 2026: What It Signals for Investor Confidence and Business Growth in Oman
MUSCAT, JANUARY 6 — Oman’s 2026 budget is being closely examined through the lens of its projected deficit. However, leading Omani brokerage firm United Securities emphasizes that the true test lies in market confidence—specifically, whether the fiscal strategy can convert optimism and credit expansion into sustained non-oil economic growth as the nation embarks on its 11th Five-Year Plan.
In a recent research note, United Securities highlights the government’s decision to base its oil price assumption at $60 per barrel. This figure provides a “sufficient margin of safety,” safeguarding the fiscal baseline while allowing for potential upside should oil prices rise. This conservative benchmark aims to avoid the volatile boom-and-bust cycles that have characterized previous budgets.
Another stabilizing factor is the increased reliance on natural gas revenues. According to United Securities, strengthening the gas sector’s contribution can reduce the budget’s susceptibility to oil price fluctuations, diversifying the hydrocarbon revenue base and enabling more predictable planning for diversification investments.
This perspective is reinforced by the better-than-expected fiscal results for 2025. The brokerage estimates the deficit at RO 480 million, notably lower than the originally forecasted RO 620 million, primarily due to higher-than-assumed oil prices and stable non-oil revenues. For 2026, the government has budgeted a deficit of RO 530 million.
United Securities underscores that deficits are no longer seen as automatic warning signs. The research note projects ongoing deficits through 2030 as part of a deliberate strategy to support investment-driven growth while maintaining debt levels within manageable bounds. Debt is expected to remain around 30–35% of GDP in 2026, aided by recent sovereign rating upgrades that should help contain borrowing costs over time.
On the growth outlook, United Securities forecasts real GDP growth of 4.0% in 2026, an increase from its 2.7% estimate for 2025, driven by both hydrocarbon and non-hydrocarbon sectors. The clear message is that fiscal discipline is designed to enable economic acceleration rather than impose austerity.
Confidence is also evident in the financial sector, where continued expansion in banking assets and lending is anticipated. The pace of further interest rate cuts is identified as a key factor that could boost credit demand in 2026. The housing sector is expected to be a primary beneficiary, illustrating that the budget’s influence extends beyond government projects to impact household and business financing conditions.
In conclusion, Budget 2026 is cautious where necessary but demands effective execution—timely project implementation, rigorous spending quality, and growth in non-oil revenues to enhance competitiveness. If these elements align, confidence may translate into robust growth. Otherwise, the deficit will remain the dominant narrative.
Special Analysis by Omanet | Navigate Oman’s Market
Oman’s Budget 2026 signals a strategic shift towards sustained, investment-led growth by balancing fiscal discipline with deliberate deficit spending to fuel diversification beyond oil. For businesses, this creates opportunities in non-oil sectors and housing finance, supported by growing credit and stable borrowing costs, while investors should watch government execution and non-oil revenue growth as key indicators of long-term confidence and market expansion.
