Oman’s economy grows amid reform progress: IMF
02/12/24
Oman’s economy is demonstrating steady growth, supported by significant reforms under Oman Vision 2040, according to the International Monetary Fund (IMF).
In its End-of-Mission report following the 2024 Article IV consultation in Muscat, the International Monetary Fund highlighted the country's successful progress in economic diversification, fiscal management and social reforms.
Oman’s non-hydrocarbon sector showed impressive growth, increasing by 1.8% in 2023 and 3.8% in the first half of 2024. Key contributors to this expansion include construction, manufacturing, and services. Overall, Oman’s economy grew by 1.2% in 2023 and accelerated to 1.9% in the first half of 2024.
Oman’s commitment to maintaining fiscal stability is evident in its low inflation rate, which remained at 0.6% in the first nine months of 2024, down from 0.9% in 2023. Additionally, the country has continued to generate fiscal and current account surpluses while reducing public sector debt. These positive developments helped secure Oman’s recent upgrade to investment-grade status by leading credit rating agencies.
The IMF stressed the importance of continuing reform momentum to ensure sustainable growth and fiscal stability. Labour market reforms are underway to increase flexibility and support small and medium-sized enterprises (SMEs), while the Oman Investment Authority is improving the business climate and attracting major investments. Renewable energy projects and digital transformation efforts are also advancing, reinforcing Oman’s economic diversification strategy.
Looking ahead, the IMF forecasts Oman’s growth to remain at 1.2% in 2024, due to ongoing oil production cuts, but expects a rebound from 2025 as hydrocarbon production increases and the non-hydrocarbon sector continues to expand. However, the IMF noted that risks such as oil price volatility, global economic slowdowns and geopolitical tensions could impact the country’s growth trajectory. Most importantly, Oman’s ongoing reforms and commitment to Vision 2040 position it for long-term economic resilience and diversification.
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