22.05.2026
Oman’s economy remained resilient in 2025, supported by steady non-oil growth, prudent fiscal management and continued reforms under Oman Vision 2040. Growth is expected to strengthen in 2026–2027 as non-hydrocarbon activity expands and hydrocarbon output improves, although the outlook remains sensitive to oil prices and regional shipping risks. Inflation remains low by regional and global standards, helped by the exchange-rate peg and contained imported price pressures. Fiscal performance has improved markedly in recent years, allowing continued debt reduction, but the budget and external position remain highly dependent on oil and gas revenues.
| Indicators | 2025 | 2026 | 2027 |
|---|---|---|---|
| GDP growth (%, yoy) | 2.6 | 3.5 | 3.8 |
| Inflation (%, yoy) | 1.3 | 1.7 | 1.9 |
| Unemployment rate (%) | 1.5 | 1.5 | 1.5 |
| Fiscal balance (% of GDP) | 1.2 | 1.8 | 1.5 |
| Gross public debt (% of GDP) | 36.1 | 33.5 | 31.0 |
| Current account balance (% of GDP) | -1.1 | -0.4 | 0.5 |
Growth strengthens as non-oil activity expands
Oman’s real GDP growth is estimated at around 2.6% in 2025, supported mainly by non-hydrocarbon sectors. Manufacturing, logistics, tourism, construction, fisheries and renewable-energy-related investment continued to benefit from reforms under Oman Vision 2040 and the government’s diversification strategy.
Growth is projected to rise to 3.5% in 2026 and around 3.8% in 2027. The improvement should be supported by stronger hydrocarbon production, continued infrastructure investment and steady non-oil expansion. However, the pace of growth remains linked to OPEC+ production policy, oil prices and regional trade-route stability.
Inflation remains low
Inflation stayed low in 2025 and is projected to remain contained in 2026–2027. The Omani rial’s peg to the US dollar helps anchor price stability, while imported inflation pressures have remained moderate. Housing, food and transport costs may add some upward pressure, but overall inflation is expected to remain below 2%.
The main inflation risks come from higher global energy prices, shipping disruptions, food prices and freight costs. If regional tensions affect trade routes or insurance costs, imported inflation could rise more quickly than expected.
Fiscal position remains in surplus
Oman’s fiscal position has improved substantially since the pandemic and the oil-price shock of 2020. The government has used higher revenues and expenditure discipline to reduce debt, rebuild buffers and strengthen fiscal credibility. The fiscal balance is estimated to have remained in surplus in 2025 and is projected to stay positive in 2026–2027.
Public debt is projected to decline from about 36% of GDP in 2025 to around 31% in 2027. This marks a major improvement from the much higher debt levels recorded earlier in the decade. However, the fiscal outlook remains exposed to oil prices, hydrocarbon production and the pace of non-oil revenue mobilisation.
External position remains oil-sensitive
The current account is estimated to have shifted into a modest deficit in 2025 as softer oil prices weighed on export receipts. It is expected to improve gradually in 2026–2027 as hydrocarbon revenues recover and non-oil exports continue to expand.
Oman’s external position remains vulnerable to oil-price volatility, shipping disruptions and regional security risks. At the same time, stronger fiscal buffers, improved debt metrics, investment-grade rating momentum and continued diversification efforts provide important resilience.
Overall outlook
Oman’s outlook remains positive, with growth expected to strengthen in 2026–2027 and inflation staying low. Fiscal consolidation has delivered a clear reduction in public debt, while reforms under Oman Vision 2040 continue to support diversification. The main medium-term challenge is to reduce reliance on oil and gas while sustaining private-sector-led growth, job creation and non-oil exports. Continued fiscal discipline, investment in logistics and tourism, renewable energy, manufacturing and labour-market reforms will be essential for maintaining resilience.
Sources:
International Monetary Fund, Oman: 2025 Article IV Consultation and Staff Report, January 2026.
International Monetary Fund, World Economic Outlook, April 2026.
Central Bank of Oman, Macroeconomic Stability Report 2025.
Central Bank of Oman, Annual Report and Economic Review materials, 2025–2026.
Ministry of Finance of Oman, Fiscal Performance and Budget Statement materials, 2025–2026.
World Bank, Gulf Economic Update, 2025–2026.
