The International Monetary Fund (IMF) has praised Oman for maintaining strong progress on structural reforms and achieving steady economic growth, even as oil production declines due to OPEC+ cuts.
An IMF team led by César Serra visited Muscat from May 21 to 29 to assess Oman’s economic developments and discuss key policy priorities.
“Oman continues to demonstrate strong reform momentum, which is helping it navigate global headwinds and accelerate economic diversification,” said Serra in a statement at the conclusion of the visit.
The IMF noted that Oman’s economy is expanding thanks to robust investments in logistics, manufacturing, renewable energy, and tourism. Inflation remains low and stable.
Despite reduced hydrocarbon output, Oman’s real GDP grew by 1.7% in 2024, up from 1.2% in 2023, driven largely by growth in non-oil sectors such as manufacturing and services. Looking ahead, the IMF projects GDP growth to rise to 2.4% in 2025 and 3.7% in 2026, as OPEC+ restrictions are gradually lifted and non-oil activity strengthens.
However, lower oil prices could place pressure on Oman’s fiscal and external balances. While the country posted a 2024 budget surplus of 3.3% of GDP, the IMF expects this to narrow to an average of 0.5% between 2025 and 2026. Improvement is expected in the medium term, backed by resumed oil production and continued fiscal discipline.
The report also highlighted Oman’s fiscal progress: public debt declined to 35.5% of GDP in 2024, from 37.5% in 2023, thanks to disciplined use of surplus funds for debt repayment. Debt held by state-owned enterprises (SOEs) also fell to about 31% of GDP, supported by reforms led by the Oman Investment Authority.
“Oman’s structural reforms are moving forward effectively,” Serra added. He noted the progress of the Oman Tax Authority’s modernization efforts, enhanced liquidity management by the Central Bank of Oman, and ongoing reforms aimed at improving access to finance.
SOE reforms have improved governance, profitability, and risk management. Meanwhile, the banking sector remains resilient, with strong asset quality, adequate capital and liquidity, and continued profitability. Private sector lending is growing, supported by a rising deposit base.
Global Outlook Risks Remain
While global trade tensions are expected to have limited direct effects on Oman—due to modest exposure to U.S. markets—indirect impacts such as lower oil prices and slowing global demand could affect future growth.
“Risks are skewed to the downside,” Serra noted. “However, faster reform implementation under Oman Vision 2040 could boost the country’s resilience and growth potential.”
Source: Muscat Daily
