IMF praises continued growth of Oman's economy

An International Monetary Fund (IMF) team concluded its preliminary meetings with the Government of the Sultanate of Oman as part of the 2025 Article IV consultations.

IMF experts and their Omani counterparts discussed key economic, financial and monetary developments, as well as progress in structural reforms in the Sultanate.

At the end of the visit, the IMF team praised the continued growth of the Omani economy. Real GDP growth reached 1.7% in 2024, up from 1.2%  in 2023, mainly driven by strong performance in non-oil sectors, particularly manufacturing, logistics, tourism and renewable energy.

Growth is expected to accelerate to 2.4% in the current year and 3.7% in 2026, driven by the gradual easing of oil production caps under the OPEC+ agreement and the continued momentum of economic diversification efforts. Inflationary pressures remain contained, with the annual inflation rate recorded at 0.9% during the first four months of 2025.

The IMF highlighted the prudent fiscal approach adopted by the Government, which resulted in a fiscal surplus of 3.3% of GDP in 2024, despite increased investments in infrastructure and essential public services.

This surplus is projected to narrow to an average of 0.5% of GDP in 2025 and 2026 due to lower oil prices, with a potential recovery over the medium term.

The Fund also noted a decline in public debt to 35.5% of GDP in 2024, commending the Government’s commitment to ongoing fiscal reforms and investment in priority sectors, as well as the progress made in strengthening the governance of state-owned enterprises under the leadership of the Oman Investment Authority.

The IMF affirmed the resilience of Oman’s banking sector, supported by high asset quality, strong capital adequacy, healthy liquidity levels and sustained profitability. It also noted the continued growth in credit extended to the private sector, underpinned by rising deposits and a positive net foreign asset position.

The IMF welcomed the progress made by the Central Bank of Oman in strengthening the liquidity management framework, alongside other initiatives aimed at developing the financial sector, expanding access to finance, and promoting financial inclusion.

The external sector also showed positive performance, with the current account posting a surplus of 2.2% of GDP in 2024. Although a temporary shift to a moderate deficit is expected in 2025–2026 due to lower oil prices and slower non-oil export growth, the external balance is projected to return to surplus as oil production gradually increases.

The IMF also commended Oman’s sustained efforts in implementing structural reforms. Key achievements include the modernisation of the tax system by the Tax Authority, the successful operation of the Future Fund in mobilising private capital, and ongoing initiatives to develop the renewable energy sector, particularly investments in green hydrogen.

The Eleventh Five-Year Plan (2026–2030) is expected to build on these gains and accelerate economic diversification in line with Oman Vision 2040.

The Central Bank of Oman expressed its appreciation for the IMF experts' positive assessment and reaffirmed its commitment to maintaining financial stability, strengthening the resilience of the banking sector, and supporting Oman’s vision for a diversified and sustainable economy.