Oman economy records significant growth in 2024

The Omani economy recorded significant growth during 2024, supported by structural reforms and the continued expansion of the non-oil sector. Inflation remained at low levels thanks to the alignment of monetary and fiscal policies.

This growth is recorded in the annual report issued by the Central Bank of Oman, which presents a comprehensive analysis of the economic and financial developments in the Sultanate of Oman during 2024.

The report confirms that both the state’s financial account and the external sector recorded relatively strong surpluses in 2024, while the public debt balance continued its downward trend.

It noted that the various fiscal policies and measures adopted enabled Oman to regain investment grade status in its sovereign credit rating, while the banking sector maintained high levels of liquidity and capitalisation.

The report explains that, thanks to Oman’s strong macroeconomic fundamentals, the domestic environment offers a valuable opportunity to advance to the next phase of structural reforms within the framework of Oman Vision 2040.

According to the report, real GDP grew by 1.6% in 2024, compared with 1.4% in 2023, driven by improved performance in the non-oil sector, which grew by 3.9% as a result of expansion in the manufacturing, services, and logistics sectors.

The report indicates that real industrial output recorded a 5% increase in 2024, recovering from a 3% decline in 2023. The manufacturing sector grew by 8.3%, while construction expanded by 2.4%, and the services sector by 3%, supported by growth in wholesale and retail trade (5.3%) and in transport and storage (4%).

The inflation rate declined significantly in 2024 compared with the previous year. The strength of the Omani rial, along with effective administrative and fiscal measures, helped contain inflation. The average rate stood at 0.6% in 2024 compared with 0.9% in 2023, reflecting lower transport costs and stable food prices. Inflation in Oman remains among the lowest in the region, supported by the government’s sound monetary and fiscal policies.

In terms of public finance, Oman’s fiscal position continued to improve in 2024, maintaining good levels of surplus, supported by favourable oil prices, prudent policy decisions, and improved fiscal discipline.

As a result, the Government achieved a fiscal surplus of 1.3% of GDP in 2024, reflecting progress in fiscal consolidation and intensified efforts to achieve long-term financial sustainability.

Thanks to these effective measures and its debt management strategy, the Greporovernment succeeded in reducing the public debt-to-GDP ratio to 35.0% in 2024, down from 37.1% in 2023.

Regarding the external position, it remained strong in 2024, supported by favourable oil prices, growth in non-oil exports, the rationalisation of current expenditures, and an inflow of foreign direct investments across several sectors, expected to contribute positively to the goals of Oman Vision 2040.

These factors resulted in a current account surplus of 2.9% of GDP in 2024.

Workers’ remittances remained stable during the year, consistent with economic demand for foreign labour — a trend partly attributed to the increasing number of Omanis joining the private sector workforce.

The report says the fixed exchange rate system of the national currency constitutes a key instrument for maintaining low and stable inflation levels. It also provides a credible nominal anchor, taking into account the structure of the Omani economy.

Throughout 2024, the Central Bank of Oman continued to adhere to established monetary policy frameworks. These aimed to ensure efficient liquidity management operations supporting domestic economic activity, in line with the accommodative monetary stance of the US Federal Reserve. Accordingly, the Central Bank of Oman reduced its base interest rate to 5.145% at the end of December 2024.

Regarding financial stability, the reports notes that the banking sector successfully maintained its strength and resilience, supported by a solid capital base, ample liquidity, and sound asset quality. The sector continued to meet the needs and requirements of economic development while focusing on digital transformation to provide financial services more effectively and on a wider scale.

The banking system in the Sultanate of Oman showed improved performance in 2024, with the total assets of the banking sector increasing by 6.6% to reach OMR 44.6 billion, and total credit rising to OMR 32.5 billion, a growth rate of 6.7% compared with 4.3% in 2023.

This credit growth was driven by a notable increase in total deposits, which rose by 9.1% to OMR 31.7 billion compared with the previous year.

The banking sector continued to achieve healthy profitability rates, reflecting the resilience of the financial system. The ratio of non-performing loans remained reasonably low at 4.5% as of December 2024, while the capital adequacy ratio stood at 18.2% at the end of 2024, compared with 19.7% in 2023. Banks also maintained adequate liquidity levels in accordance with regulatory liquidity requirements.

The report notes that Oman updated its banking regulatory framework during the year in accordance with Royal Decree No. 2/2025, issuing the Banking Law. The new law aligns with international best practices and aims to strengthen the banking sector’s resilience, transparency, and competitiveness.

The law also provides greater flexibility in regulating emerging banking operations and technologies. It includes provisions related to the use of risk-based supervisory tools to enhance the effectiveness of regulatory oversight.

In addition, the Central Bank of Oman launched an important initiative requiring banks to allocate part of their credit or financing to priority economic sectors such as agriculture, fisheries, mining, logistics, tourism, and renewable energy, in line with national development priorities.

Real GDP is expected to grow by 2.9% in 2025, driven by non-oil sectors, while inflation is projected to remain low. The fiscal and current account balances are anticipated to record slight deficits, with public debt remaining within sustainable levels at around 35.6% of GDP.

As the Tenth Five-Year Development Plan (2021–2025) concludes at the end of this year, Oman has made substantial progress toward achieving its strategic goals under Oman Vision 2040. Efforts to diversify the economy, ensure fiscal sustainability, enhance private sector participation, and implement institutional reforms have laid a solid foundation for strong and inclusive growth.

The report concludes that ongoing reforms and a resilient banking sector ensure that the Sultanate of Oman remains well-positioned to withstand global challenges and continue advancing its long-term development strategy.