MUSCAT: The Ministry of Economy has highlighted improving economic prospects for the Sultanate of Oman, supported by resilient domestic indicators and gradual recovery in global conditions, despite persistent uncertainties linked to international trade and energy market volatility.
According to the ministry’s latest quarterly bulletin, the International Monetary Fund revised its global growth forecast upwards to 3.3 per cent in January 2026, compared to 3.1 per cent projected in October 2025. The upgrade reflects the global economy’s ability to absorb trade disruptions witnessed last year, aided by easing tariff pressures and continued investment momentum, particularly in artificial intelligence and advanced technologies.
The IMF maintained its 3.3 per cent growth outlook for 2025, while cautioning that evolving geopolitical tensions and rapid technological shifts could pose downside risks. Global trade growth is expected to slow to 2.6 per cent in 2026 from 4.1 per cent in 2025, indicating moderating external demand. Inflation is projected to ease to 3.8 per cent, while global debt is anticipated to climb to a record $348 trillion by the end of 2025, driven largely by higher public borrowing in major economies.
Within this global context, Oman’s fiscal position recorded a shift in 2025, with the state budget posting a deficit of RO 480 million compared to a surplus of RO 540 million in 2024. The reversal was primarily attributed to a decline in oil and gas revenues, which resulted in a 7.99 per cent drop in total public revenues, while public expenditure remained broadly stable over the same period.
Despite these pressures, Oman’s credit profile strengthened, reflecting improved fiscal management and economic stability. Fitch Ratings upgraded the Sultanate of Oman to investment grade (BBB-) with a stable outlook, while Standard & Poor's reaffirmed its BBB- rating with a stable outlook. Moody's also raised Oman’s rating to Baa3 with a stable outlook, underscoring confidence in the country’s capacity to meet its financial obligations.
External trade data showed mixed performance. Total merchandise exports declined by 7.14 per cent to RO 23.26 billion in 2025, largely due to a 15.21 per cent drop in oil exports. However, non-oil exports posted solid growth of 7.48 per cent, reflecting ongoing diversification efforts. Imports rose by 2.72 per cent to RO 17.17 billion, resulting in a trade surplus of RO 6.10 billion.
Economic activity remained on a growth trajectory. Gross domestic product (GDP) at current prices expanded by 2.3 per cent to RO 42.14 billion in 2025, driven by a sharp increase in natural gas activity, which surged by 56.94 per cent, alongside a 3.71 per cent rise in non-oil sectors. At constant prices, GDP grew by 2.4 per cent, supported by a 3.11 per cent expansion in non-oil activities, including agriculture, industry and services. Oil sector value added also recorded a modest increase of 1.09 per cent.
Inflation remained contained, rising slightly to 0.99 per cent in 2025 compared to 0.60 per cent in 2024, staying within manageable levels. Meanwhile, foreign direct investment (FDI) increased by 8.13 per cent to reach RO 31.38 billion by the end of 2025, with the oil and gas extraction sector accounting for the largest share, followed by manufacturing and financial services.
In terms of investor origin, the United Kingdom ranked as the leading source of FDI, followed by the United States and Kuwait.
The ministry affirmed that these indicators collectively point to strengthening economic resilience, supported by steady non-oil sector growth, improved fiscal discipline and a more attractive investment environment, positioning Oman for a more optimistic medium-term outlook. — ONA
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