IMF says oil output to back Oman’s economic rebound

Oman’s economy is on track to rebound in 2025, driven by higher hydrocarbon production and robust growth of the non-hydrocarbon sector, the International Monetary Fund (IMF) has said.

Growth is, however, projected to remain at 1.2 percent this year, weighed down by extended Opec+-related oil production curbs.

Fiscal and current account balances are forecast to remain in surplus over the medium term, but lower than their current levels as oil prices soften.

The economic outlook faces significant risks, the IMF says, including oil price volatility, a potential global slowdown and heightened geopolitical tensions.

According to the IMF, reform implementation under Oman’s Vision 2040 is proceeding “decisively”, with progress made on strengthening social safety nets, increasing labour market flexibility, enhancing the business environment, overhauling state-owned enterprises and advancing climate and digitalisation policies.

Key priorities include boosting non-hydrocarbon revenues through comprehensive tax reforms and phasing out untargeted subsidies.

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These measures aim to free up resources to finance growth-enhancing investments to advance the sultanate’s diversification agenda.

The IMF reaffirmed that the exchange rate peg remains “appropriate and credible policy anchor” for the country.

The Gulf nation’s sovereign credit rating has been upgraded recently to “investment grade”, reflecting the marked improvement in its fundamentals.