Monday 09 / November / 2026
Muscat: Oman’s gross domestic product (GDP) growth is projected to accelerate to 4.5 percent in 2026, driven by stronger hydrocarbon activity and sustained nonhydrocarbon growth of 1.4 percent, according to a new report.
“Average inflation is expected to reach 3 percent in 2026 before gradually easing toward 2 percent over the medium term and the fiscal balance is expected to remain strong, with the fiscal surplus averaging about 5.3 percent of GDP during 2026–27,” the International Monetary Fund (IMF) staff team, said in a statement on Monday.
The IMF staff team was led by Abdullah AlHassan and the 2026 Article IV consultation discussions in Muscat was conducted during October 25–November 8, 2026.
The current account is projected to return to a surplus of around 6.5 percent of GDP in 2026 and remain positive over the medium term.
"The Omani economy entered 2026 from a position of strength. Economic growth accelerated in 2025 and remained resilient in the first half of 2026, with real GDP expanding by 3.8 percent as stronger hydrocarbon activity offset weakness in construction, manufacturing, and tourism-related activities,” AlHassan further said.
Average inflation remained contained at 1 percent in 2025 but rose to about 3.0 percent (year-on-year) during January-September 2026, mainly reflecting higher food and transportation costs. Fiscal and external balances remained in surplus, with the fiscal surplus reaching 1.9 percent of GDP and the current account surplus estimated at 3.7 percent of GDP in the first half of 2026. Government debt declined to 30.4 percent of GDP at end-June 2026.
AlHassan further said, "The fiscal stance in 2026 appropriately cushions the impact of the war while preserving fiscal prudence. Any additional support for vulnerable households and viable firms should be temporary, targeted, transparent, and accommodated through expenditure reprioritisation.”
Additional oil windfalls should help rebuild buffers while creating space for investment in resilience and diversification. “Over the medium term, sustained implementation of fiscal reforms, including stronger tax administration, the phasing out of untargeted subsidies while protecting the most vulnerable, and greater public investment efficiency, together with stronger fiscal frameworks, will be essential to safeguard fiscal sustainability and further enhance policy credibility.”
"The exchange rate peg remains an appropriate and credible policy anchor. Steadfast implementation of the Monetary Policy Enhancement Project—including toward operationalising an interest rate corridor and an overnight Omani Rial standing deposit facility— together with the gradual transition to a full-fledged treasury single account would strengthen monetary policy transmission and support the development of domestic money and capital markets,” he added.
"The banking sector remains well capitalised, liquid and profitable, with limited direct exposure to the sectors most affected by the conflict. Continued implementation of the 2025 Financial Sector Assessment Programme recommendations is important. Priorities include strengthening the macro-prudential framework, and fully operationalising financial safety nets, and crisis-management arrangements.”
AlHassan further said, "Heightened regional and global uncertainty reinforces the need to accelerate the economic transformation and strengthen resilience under Vision 2040. Looking ahead, priorities include enhancing the efficient allocation of economic resources, reducing the state’s footprint where private participation is viable, advancing labour market reforms, fostering trade integration, and strengthening resilience to natural disasters."
