Oman’s Economy Poised for 2.4% Growth in 2026: What Investors and Business Owners Need to Know
MUSCAT, JUNE 15 — Oman’s economy is forecast to grow by 2.4 percent in 2026, despite a significant slowdown across Gulf hydrocarbon-exporting countries, according to the World Bank’s June 2026 Global Economic Prospects report. This projection is 1.2 percentage points lower than the Bank’s earlier forecast in January.
The regional outlook presents a more challenging picture. Growth in Gulf Cooperation Council (GCC) countries is expected to slow sharply to 1.3 percent in 2026, down from 4.5 percent in 2025. Hydrocarbon exporters throughout the Middle East are projected to grow by a mere 0.3 percent this year, a downward revision of 4.3 percentage points from January estimates.
Despite the broader slowdown, Oman is anticipated to outperform several of its GCC counterparts. Kuwait’s economy is predicted to contract by 6.4 percent, while Qatar’s is expected to shrink by 5.7 percent — both figures reflecting significant downward revisions of nine and eleven percentage points respectively. Meanwhile, Bahrain is forecast to grow by 1.3 percent, the UAE by 2.4 percent, and Saudi Arabia by 3.1 percent.
The World Bank attributes Oman’s relatively moderate slowdown to its strategic port locations, noting that the country is less vulnerable to conflict because its main ports—Salalah, Al Duqm, and Suhar—are situated outside the Strait of Hormuz. These ports have helped maintain trade and cargo flow amid regional shipping disruptions. In contrast, some Gulf economies face greater exposure to interruptions affecting energy exports and maritime traffic. Saudi Arabia’s growth outlook benefits from its ability to reroute oil exports via the East-West pipeline.
The report highlights that reduced ship transit through the Strait of Hormuz and damage to energy infrastructure have impacted oil and gas production in parts of the region. Inflationary pressures are expected to rise due to higher food prices and increased shipping costs.
Fiscal challenges are also noted, as Kuwait and Qatar’s economic slowdowns are likely to worsen their fiscal and current account balances, caused by declining hydrocarbon revenues and increased defense spending.
Looking ahead, the World Bank projects Oman’s growth will strengthen to 3 percent in 2027 and 3.4 percent in 2028. This improvement is expected as hydrocarbon output recovers, infrastructure investment continues, and non-oil sectors expand. Inflation is anticipated to moderate with improved trade conditions and lower transport costs. Fiscal balances should improve with higher hydrocarbon revenues, while current account surpluses are expected to narrow due to lower energy prices.
For the broader region—including the Middle East, North Africa, Afghanistan, and Pakistan—growth is forecast to slow to 1.6 percent in 2026 from 4 percent in 2025. The World Bank foresees a recovery to an average growth rate of 4.5 percent during 2027 and 2028, assuming easing of conflict-related disruptions by year-end. However, the outlook remains highly uncertain.
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Oman’s projected 2.4% economic growth in 2026, outperforming many GCC peers despite regional slowdowns, highlights the strategic advantage of its port infrastructure outside the Strait of Hormuz, ensuring resilient trade flows. Smart investors and entrepreneurs should capitalize on Oman’s growing non-oil sectors and infrastructure investments while preparing for a gradual recovery in hydrocarbon output, positioning themselves for the anticipated growth acceleration through 2028.
