Since His Majesty Sultan Haitham bin Tarik ascended to the throne, Oman’s economy has witnessed robust growth, driven by strategic reforms aimed at diversifying income sources, boosting non-oil revenues, and encouraging private sector involvement.
Key reforms have significantly improved economic performance, with the government steadfastly reducing the fiscal deficit, promoting financial stability, and enhancing productivity. A cornerstone of these efforts is the medium-term financial plan (2020–2024), which prioritizes spending efficiency, broadening revenue streams, and reinforcing social protection mechanisms. These initiatives have laid a solid foundation for long-term fiscal sustainability.
The National Programme for Financial Sustainability and Financial Sector Development (2023–2025) plays a pivotal role in fostering an innovative financial sector and providing diversified financing solutions for sustainable economic growth. Alongside this, the private sector has become a major contributor to economic diversification, particularly in non-oil sectors. Programmes like Nazdaher have unlocked opportunities for private companies, fostering innovation and investment.
Strategic projects such as the Duqm Refinery, the Fish Canning and Value-Added Complex, and renewable energy ventures have propelled Oman’s economic transformation. These projects have not only attracted significant domestic and international investments but also bolstered Oman’s global investment appeal.
Fiscal and Credit Successes
Oman has made remarkable progress in reducing public debt, which dropped to RO14.4bn (34% of GDP) in 2024 from RO19.8bn (68% of GDP) in 2020. This achievement reflects stringent fiscal measures, improved public spending efficiency, and increased non-oil revenues, supported by higher oil prices.
The sultanate’s improved credit ratings underscore this progress. Between 2020 and 2024, Standard & Poor’s upgraded Oman’s rating from B+ to BBB-, Fitch improved it from BB- to BB+ with a positive outlook, and Moody’s raised it from Ba3 to Ba1, highlighting growing investor confidence in Oman’s economic stability.
Strong GDP Growth and Investments
In 2023, Oman’s economy achieved an impressive GDP growth of 38%, with real GDP at current prices reaching RO40.7bn. This growth was fueled by a 27.8% expansion in the oil sector and 6.2% growth in non-oil activities. Oil prices surged to an average of US$80.7 per barrel, a 75% increase compared to 2020 levels. Real GDP is expected to grow by 2.7% in 2025, with investments averaging an 11.7% increase between 2021 and 2023, totaling RO10.9bn.
Despite this progress, private sector investment still falls short of the targets set in development plans. Strengthening the private sector’s role in national investments remains a priority.
Stability Amid Global Challenges
Oman has maintained a low average inflation rate of 1.7% from 2021 to 2023, supported by government interventions such as fixed fuel prices and subsidies for essential food items. Monetary indicators also show positive trends, with local liquidity growing by 7.7% and banking sector deposits rising by 8.1% as of October 2024.
The Muscat Stock Exchange has grown steadily, with its index increasing by 5.4% between 2020 and 2024. Oman’s trade balance has improved significantly, with a trade surplus of RO7.8bn in 2023, compared to RO1.5bn in 2020. This growth is attributed to strong oil exports and a rebound in non-oil exports.
Surging Foreign Investment
Foreign direct investment (FDI) has surged, with inflows rising by 121% between 2020 and 2023 to reach RO4.8bn. The cumulative FDI value by the end of 2023 stood at RO25.4bn, reflecting Oman’s success in creating an attractive investment climate.
Through these concerted efforts and reforms, Oman continues to build a resilient and diversified economy, paving the way for sustainable growth and prosperity.
