A team from the International Monetary Fund (IMF), led by César Serra, visited Muscat, Oman, from May 21 to 29, 2025. The purpose of the visit was to review economic and financial developments in the country, assess its future outlook, and discuss policy priorities.
In a statement at the end of the mission, Mr. Serra noted that "Oman’s economy continues to grow, while inflation remains low." Despite reduced hydrocarbon output due to OPEC+ oil production cuts, real GDP growth improved to 1.7% in 2024 from 1.2% in 2023. This increase was driven by strong nonhydrocarbon activities in manufacturing and services. Looking ahead, overall GDP growth is expected to rise to 2.4% in 2025 and 3.7% in 2026 as OPEC+ restrictions ease and nonhydrocarbon sectors continue expanding.
However, Mr. Serra highlighted challenges such as "lower oil prices" impacting fiscal and external positions. The fiscal surplus narrowed to an average of 0.5% of GDP for 2025-2026 after reaching 3.3% of GDP in 2024 due to increased investments in infrastructure and other sectors. Central government debt decreased further to 35.5% of GDP in 2024 as part of efforts to repay debt using fiscal surpluses.
State-owned enterprises (SOE) also saw their debt reduced under reforms led by the Oman Investment Authority. The current account balance showed a surplus of 2.2% of GDP in 2024 but is projected to shift into a deficit averaging about 2% of GDP for the next two years due to lower oil prices.
The banking sector remains robust with strong asset quality and liquidity ratios supporting profitability. Private sector credit growth is supported by an expanding deposit base.
Risks are predominantly on the downside according to Mr. Serra: "While the direct impact of global trade tensions is expected to be limited—given Oman’s modest exports to the U.S.—indirect effects could be more pronounced." He warned that these risks could dampen oil demand and prices further affecting growth.
On a positive note, structural reforms continue with progress reported on several fronts including tax administration modernization and SOE governance improvements under Oman Vision 2040.
The IMF team expressed gratitude towards Omani authorities for their hospitality during discussions which they described as open and productive.