IMF praises Oman but urges faster diversification

• Oman’s economy is ‘resilient’
• Must push harder away from oil and gas
• Economic outlook is ‘favourable’

Oman’s economy is proving resilient in the face of uncertain times and is expected to continue growing in the coming years, the International Monetary Fund said at the conclusion of its annual review process.

The country “must harness this positive momentum and accelerate its push to diversify away from oil and gas”, according to a press release issued on Thursday. 

The sultanate maintains subdued inflation and robust fiscal and current account buffers despite lower oil prices and regional tensions, the fund found. It enjoys a “favourable” economic outlook with near-term risks “tilted to the downside.” 

The IMF’s executive directors joined staff in applauding Oman’s reform agenda, highlighting efforts to deepen the financial sector, bolster the labour market, streamline regulations and advance renewable energy production and digitalisation.

Oman is one of few countries that remain committed to green hydrogen and last week it laid the groundwork to establish an international financial centre in Muscat. 

“Directors welcomed the authorities’ continued commitment to prudent fiscal management and intergenerational equity,” the IMF said. 

“They emphasised the need to further advance tax policy and administration reforms, phase out untargeted subsidies while protecting the most vulnerable, and rationalise non-essential spending.”

Oman economic indicators at a glance

The press release and comments came alongside a full report the IMF published upon completing the 2025 assessment of the Omani economy pursuant to its Article IV process.

Oman’s success in putting its fiscal house in order in recent years has won it wide praise from the IMF and other quarters, as well as a return to an investment-grade rating and lively market for new equity issuances. 

The report recognised Oman’s “important strides” toward economic diversification, but noted progress in the sultanate lags behind that in other GCC countries.

“With heightened global uncertainty and lower oil prices, there is a premium for Oman to accelerate its economic transformation,” the report said.

Further reading:

• Oman GDP rises on growing non-oil revenues
• Oman plans $2bn borrowing to cover budget deficit
• Oman revenue hit by drop in oil and gas income