IMF Praises Oman’s Economic Resilience: What Investors and Entrepreneurs Need to Know About Upcoming Reforms
MUSCAT: The International Monetary Fund (IMF) has reaffirmed the Sultanate of Oman’s robust economic performance, highlighting its resilience amid global uncertainties, strong non-hydrocarbon sector growth, and continued fiscal discipline. Following the conclusion of its 2025 Article IV mission, the IMF reported that Oman’s economy is steadily expanding, inflation remains low, fiscal and external positions are solid, and public debt has declined further.
An IMF team, led by Abdullah al Hassan, conducted consultations in Muscat from November 9 to 24. The Fund’s concluding statement emphasized that growth during 2024 and the first half of 2025 was driven by manufacturing, logistics, construction, trade, agriculture, and fisheries, which offset a decrease in hydrocarbon output due to OPEC+ production limits. Inflation dropped to 0.6% in 2024 and remained contained at 0.9% from January to October 2025. Oman recorded a fiscal surplus of 3.3% of GDP in 2024, while the current account surplus stood at 3.2%. Government debt decreased to 36.1% of GDP by September 2025.
Looking ahead, the IMF’s outlook remains positive. Economic growth is projected to strengthen in 2025-26 as oil production restrictions are eased and non-hydrocarbon sectors continue to expand. Inflation is expected to stay low, moving toward 2% over the medium term. Although the current account may experience a deficit during 2025-27 due to lower oil prices, it is anticipated to return to surplus as oil production recovers and non-hydrocarbon exports grow. However, the IMF warned that intensified geopolitical tensions and global uncertainties pose risks to this outlook.
The Fund praised Omani authorities for their commitment to fiscal prudence, noting a reduced non-hydrocarbon primary deficit in 2025, attributed to spending restraint and enhanced revenue collection. It underscored the importance of ongoing tax administration modernization, the implementation of VAT e-invoicing, and the planned introduction of a personal income tax on high earners in 2028 for long-term fiscal sustainability. Further reforms recommended include subsidy rationalisation, strengthened fiscal frameworks, and better management of sovereign assets and liabilities.
The IMF confirmed that Oman’s exchange rate peg remains appropriate and effective in stabilizing inflation. Continued monetary reforms and improvements in cash management are expected to enhance policy effectiveness. The banking sector was described as strong and well-capitalized, with sufficient liquidity and steady profitability. Additionally, the Fund identified deeper capital markets and improved regulatory oversight as priorities.
Progress under Oman Vision 2040 was also recognised, with the IMF highlighting key reforms in the labour market, business environment enhancements, renewable energy initiatives, digital transformation, and AI readiness as critical to accelerating economic diversification and private-sector job creation.
Special Analysis by Omanet | Navigate Oman’s Market
The IMF’s positive assessment of Oman’s resilient economic growth, fiscal discipline, and momentum in non-hydrocarbon sectors signals strong opportunities for businesses to invest in manufacturing, logistics, agriculture, and digital transformation. However, smart investors should remain cautious of geopolitical risks and potential current account deficits in the short term, while leveraging forthcoming reforms and diversification initiatives under Oman Vision 2040 to capitalize on sustainable growth and market expansion.
