17/06/2026 04:14 AST
Oman's economy has shown resilience despite the war affecting the Middle East, with the International Monetary Fund upgrading its growth forecast for the country by 0.2 percentage points.
Releasing its assessment of Oman's economic outlook amid continued regional conflict after a staff visit to Muscat, the organization stated that Oman is set to see a 3.7 percent expansion to its economy in 2026, up from the 3.5 percent projected in April.
The visit came days after Oman's Minister of Finance Sultan bin Salim Al-Habsi met in Washington with the IMF Executive Director for Arab countries and the Maldives, Mohammed bin Ahmed Maait, where the two sides discussed deepening cooperation on technical support and capacity-building in the financial and economic fields.
Abdullah Al-Hassan, who led the IMF team in Oman, said the country's economy "continues to demonstrate resilience in the face of headwinds" from the war.
He added: "Oman's oil and natural gas infrastructure has remained largely unaffected, enabling Oman to increase oil production and exports amid regional supply disruptions.
"The strong growth momentum continues, while inflation is accelerating.
Real GDP growth accelerated in 2025 to 2.4 percent (from 1.6 percent in 2024), supported by both the hydrocarbon and nonhydrocarbon activities. Growth is projected at around 3.7 percent in 2026, driven by increased oil production, and 3 percent in 2027."
The IMF warned that inflation in the country 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 has continued its downward trajectory, falling to 34.7 percent of GDP at end-2025. The current account, which posted a 1.9 percent deficit last year, is expected to swing to a surplus of around 3 percent of GDP in both 2026 and 2027.
"Given the elevated uncertainty from the war, risks to the near-term outlook are tilted to the downside," the IMF said.
A prolonged escalation of the conflict could dampen tourism, nonhydrocarbon exports, and foreign direct investment. Upside scenarios include a swift resolution of the war, higher sustained oil prices, and an accelerated pace of structural reforms under Oman Vision 2040.
The fund urged Oman to sustain reform momentum, citing priorities, including improved tax administration, stronger medium-term fiscal frameworks, greater transparency for state-owned enterprises, higher female labor force participation, and continued investment in renewable energy.
Arab News
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