IMF Praises Oman’s Economic Resilience and Reform Momentum: What It Means for Investors and Business Growth
مسقط: The International Monetary Fund (IMF) has praised the resilience of Oman’s economy and the sustained progress of its structural reforms following its Article IV consultation mission for 2026.
An IMF delegation, led by Abdullah AlHassan, visited Muscat from June 7 to 15 to review economic and financial developments, assess the outlook, and engage with government officials on policy priorities.
The IMF noted that Oman’s economy remains robust despite regional challenges stemming from the Middle East conflict. The impact on the Sultanate has been largely limited to inflationary pressures and effects on certain non-hydrocarbon sectors.
The Fund highlighted that Oman’s oil and natural gas infrastructure has been largely intact, enabling the country to boost oil production and exports amid regional supply disruptions.
Oman’s real GDP growth accelerated to 2.4 percent in 2025, up from 1.6 percent in 2024, driven by both hydrocarbon and non-hydrocarbon sectors. Growth is projected to increase further to around 3.7 percent in 2026, supported by higher oil production, before moderating to 3 percent in 2027.
Non-hydrocarbon growth is expected to slow to 2.5 percent in 2026 due to the regional conflict’s impact on tourism and construction but is forecast to rebound to 3.2 percent in 2027 with a broad-based recovery.
Inflation remained subdued at an average of 1 percent in 2025 but rose to 2.8 percent year-on-year during January-May 2026, mainly due to higher food and transportation costs.
Oman’s fiscal and external positions are set to improve, supported by increased oil revenues and sustained fiscal discipline. After narrowing to 0.6 percent of GDP in 2025 amid lower oil prices and higher capital spending, the fiscal surplus is expected to widen to 4.5 percent of GDP in 2026 and 4.2 percent in 2027.
Central government debt continued to decline, reaching 34.7 percent of GDP by the end of 2025.
The current account, which showed a deficit of 1.9 percent of GDP in 2025, is projected to turn into a significant surplus of around 3 percent of GDP in both 2026 and 2027, supported by stronger hydrocarbon revenues and growth in non-hydrocarbon exports.
The IMF also commended the resilience of Oman’s banking sector, noting its strong capital and liquidity ratios, asset quality, and profitability.
However, the Fund warned of downside risks due to ongoing regional conflict uncertainty, which could lead to a deeper regional and global slowdown, affecting tourism, exports, foreign direct investment, and Oman’s overall growth and fiscal stability.
Conversely, potential upside risks include a swift resolution of the conflict, sustained higher oil prices and production, increased transportation and logistics activity enhancing regional integration, and an accelerated pace of reforms under Oman Vision 2040.
The IMF emphasized that sustaining the momentum of policy reforms is crucial for advancing Oman’s economic transformation and strengthening fiscal and external sustainability.
Key priorities identified include enhancing tax administration, strengthening medium-term fiscal frameworks, adopting an active liquidity management approach, deepening the financial sector, improving transparency of state-owned enterprises, boosting female labor force participation, and advancing renewable energy initiatives.
The Fund’s concluding remarks underscored Oman’s steady progress in implementing structural reforms and maintaining macroeconomic stability, highlighting the continued need for reforms to support growth, diversification, and long-term resilience.
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Oman’s economy is showing remarkable resilience amid regional turmoil, with strong growth driven by hydrocarbon production and disciplined fiscal management. For businesses and investors, this means opportunities in energy, non-hydrocarbon exports, and financial services, while they should remain cautious of potential downside risks from prolonged regional conflict. Smart investors should focus on sectors aligned with Oman Vision 2040 reforms and emerging areas like renewable energy and financial sector deepening to capitalize on the projected economic recovery and diversification.
