IMF Projects Continued Stability for Oman Economy Despite Regional Uncertainty
RIYADH — The International Monetary Fund has upgraded Oman’s growth forecast for 2026, projecting a 3.7 percent expansion — up 0.2 percentage points from its April estimate as the sultanate’s economy shows resilience despite the regional conflict.
“The country’s oil and natural gas infrastructure has remained largely unaffected, enabling Oman to increase oil production and exports amid regional supply disruptions,” said Abdullah Al‑Hassan, who led the IMF team following a staff visit to Muscat.
Real GDP growth accelerated to 2.4 percent in 2025, supported by both hydrocarbon and non‑hydrocarbon activity. However, inflation is climbing. After averaging just 1 percent in 2025, it rose to 2.8 percent across the first five months of 2026, driven by higher food and transportation costs.
On the fiscal side, the picture is brightening. The fiscal surplus is projected to widen to 4.5 percent of GDP in 2026, recovering from a narrow 0.6 percent in 2025. Central government debt fell to 34.7 percent of GDP at end‑2025, and the current account is expected to swing from a deficit to a surplus of around 3 percent of GDP.
Despite the upgrades, the IMF warned that risks remain tilted to the downside. A prolonged escalation of the conflict could dampen tourism, non‑hydrocarbon exports, and foreign direct investment. The fund urged Oman to sustain reforms, including improved tax administration, stronger fiscal frameworks, greater transparency for state‑owned enterprises, higher female labor force participation, and continued investment in renewable energy.
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