Muscat: The meetings of the International Monetary Fund (IMF) experts mission to the Sultanate of Oman, within the framework of the 2025 Article IV Consultations, concluded in Muscat. During these meetings, discussions were held with government officials, as well as representatives from the private and banking sectors, to review the latest macroeconomic developments, fiscal and monetary policies, and structural reforms.
According to Oman News Agency, the IMF expert mission affirmed in its concluding statement that Oman’s economic growth remained strong in 2024 and the first half of 2025. This growth was driven by expansions in sectors such as manufacturing, wholesale and retail, logistics, construction, and agriculture and fishing, despite a contraction in hydrocarbon GDP due to OPEC+ production curbs. The statement also highlighted that inflation eased to 0.6 percent in 2024 and remained steady at 0.9 percent in the first ten months of 2025. The fiscal balance and current account both posted surpluses, and government debt stood at 36.1 percent of GDP by September 2025.
The economic outlook for Oman remains favorable, with growth projected to strengthen over 2025-26 as oil production cuts unwind and nonhydrocarbon activity continues to expand. Inflation is expected to remain low and approach 2 percent in the medium term. Fiscal and external positions are anticipated to stay solid, although the current account is projected to shift into deficit during 2025-27, mainly due to lower oil prices, before returning to surplus as oil production and nonhydrocarbon exports recover.
The IMF highlighted the importance of fiscal reforms such as tax administration modernization, the rollout of VAT e-invoicing, and the introduction of a personal income tax on high-income earners by 2028 to reinforce fiscal sustainability. Additional reforms include rationalizing non-essential spending, phasing out untargeted energy subsidies, and developing a sovereign asset-liability management framework to enhance policy credibility.
Monetary policy enhancements, such as the introduction of an Omani Rial standing deposit facility and transitioning to a full-fledged treasury single account, are expected to strengthen monetary policy transmission. Efforts to improve the macroprudential framework, enhance regulatory data, and deepen capital markets will be crucial to safeguarding financial stability.
The statement also emphasized that the 11th Development Plan presents an opportunity to accelerate economic diversification and boost productivity. Priorities include advancing labor market reforms, improving the business environment, enhancing SME support, and pursuing renewable energy initiatives and digital transformation.