Oman’s 2026 Budget: How Banks, the Bourse, and FDI Shape Opportunities for Investors and Entrepreneurs
MUSCAT, JAN 5 – The 2026 State General Budget of Oman will likely be evaluated not just by its projected deficit, but by its ability to transform growing investor confidence into sustained non-oil growth. According to analysis from leading brokerage firm United Securities, indicators suggest a rise in banking activity, a notable rebound in the Muscat Stock Exchange, and increased foreign direct investment (FDI).
United Securities reported that the Muscat Stock Exchange (MSX) surged by 28.2% in 2025, with the MSX30 index reaching 5,985 in December and ending the year near its peak. This increase is attributed to improving market sentiment driven by positive domestic developments and regulatory support.
The report highlights a robust banking sector, with total assets increasing by 6.6% year-on-year during the first nine months of 2025. Credit extended by banks rose by 8.0%, and bank investments saw a significant jump of 19.1%. The asset quality remained stable, with non-performing loans at 4.5% and a capital adequacy ratio of 18%.
Foreign direct investment rose by 12.8% year-on-year in the first half of 2025, largely due to increased funding in oil and gas exploration, manufacturing, and construction. The United Kingdom, the United States, and Kuwait continued to be the top three sources of FDI.
The 2026 budget anticipates a deficit of RO 530 million, following an estimated deficit of RO 480 million in 2025, which was below the initial budget projections. Funding for the 2026 deficit is expected to come from RO 130 million in borrowing, with the remaining RO 400 million sourced from reserve withdrawals. Despite this planned borrowing, experts project that the debt-to-GDP ratio will remain within the 30-35% range for 2026.
A fiscal summary in the report shows total debt projected at RO 13.827 billion—approximately 33.0% of GDP—alongside anticipated total revenues of RO 11.447 billion and expenditures of RO 11.977 billion.
Additionally, the report noted improvements in sovereign ratings from Moody’s and Fitch in 2025, while S&P reaffirmed its rating with a stable outlook. Such developments are expected to gradually lower borrowing costs for the government.
Population trends also play a significant role in evaluating the 2026 budget. As of September 2025, Oman’s population stood at 5.3 million, with Omanis making up 56.6%. This demographic context underscores the importance of ensuring that investment and credit growth translate into job creation, services, and robust private-sector expansion.
Special Analysis by Omanet | Navigate Oman’s Market
Oman’s 2026 budget deficit reflects strategic borrowing and reserve withdrawals, signaling an emphasis on fiscal prudence while maintaining a manageable debt-to-GDP ratio. For businesses, this presents opportunities in non-oil sectors as investor confidence surges, particularly in construction and manufacturing fueled by rising foreign direct investments. Smart investors should leverage this momentum by targeting sectors aligned with governmental support, ensuring they can capitalize on the projected economic recovery and increasing banking activity.
