IMF praises Oman’s fiscal management and resilient economy

• ‘Favourable’ economic outlook
• Non-oil sectors driving expansion
• Progress on tax modernisation

The International Monetary Fund praised Oman’s economic and fiscal management following its staff’s latest visit to the country, which concluded this week.

IMF officials recommended Omani authorities stay the course on cautious and targeted public spending and increased tax collection, and that they further push to develop the national financial industry to bolster economic diversification and the private sector.

Oman’s economy has remained resilient in 2025 in the face of global volatility, regional tensions and ups and downs in oil prices, according to a press release.

“The economic outlook remains favourable,” said Abdullah AlHassan, the IMF mission chief for Oman, after conducting meetings in Muscat this month.

“Growth is projected to strengthen over 2025-26 as oil production cuts unwind and non-hydrocarbon activity continues to expand,” he said.

Non-oil sectors such as manufacturing, wholesale and retail, logistics, construction, agriculture and fishing drove a “strong” economic expansion last year and during the first six months of this year. 

Oman GDP growth

Inflation is subdued, at below 1 percent between January and October 2025, while the fiscal and current-account balances registered surpluses of more than 3 percent in 2024, according to the fund. 

“Fiscal and external positions are anticipated to remain solid, with fiscal surpluses projected to persist,” AlHassan said. 

Oman’s government debt was 36.1 percent of gross domestic product in September.

AlHassan commended Omani authorities’ commitment to “fiscal prudence”, noting their “restraint” on spending and ability to increase government receipts from non-oil activities. 

• Work starts on Oman-UAE $2bn economic free zone
• Oman digs deep to maximise the Empty Quarter’s potential
• Oman debt ratios to improve even if oil prices soften

The country’s recent fiscal turnaround has earned it sovereign credit-rating upgrades this year, putting it back into the lower tier of investment-grade.

“Continued progress on tax administration modernisation, rolling out VAT e-invoicing, and introducing a personal income tax on high-income earners in 2028 will be central to reinforcing fiscal sustainability,” he said.

Oman also needs to deepen its capital markets to ensure private-sector companies can access more diversified sources of financing, according to AlHassan, who separately noted that labour, social and regulatory reforms under Oman Vision 2040 “continue to advance”.