## IMF Staff Concludes Staff Visit to Oman

_IMF News, June 2, 2025_

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**Canonical URL:** [IMF Staff Concludes Staff Visit to Oman](https://www.imf.org/en/news/articles/2025/06/02/pr-25172-oman-imf-staff-concludes-staff-visit)

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## Bibliographic details
- Published: June 2, 2025

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### Mission overview
- A staff team from the International Monetary Fund (IMF), led by Mr. César Serra, visited Muscat, Oman, during May 21-29, 2025, to discuss economic and financial developments, the outlook, and the country’s policy priorities.
- End-of-Mission press release conveying preliminary findings; views are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board. This mission will not result in a Board discussion.

### Macroeconomic performance and outlook
- Real GDP growth:
  - 2023: 1.2 percent
  - 2024: 1.7 percent
  - Projected 2025: 2.4 percent
  - Projected 2026: 3.7 percent
- Drivers of growth:
  - Strengthened nonhydrocarbon activity, notably in manufacturing and services.
  - Ongoing investments in logistics, manufacturing, renewable energy, and tourism.
  - Phase-out of OPEC+ curbs expected to support medium-term expansion.
- Inflation:
  - 2024: 0.6 percent
  - January–April 2025 (year-over-year): 0.9 percent
  - Overall characterization: inflation remains low.

### Fiscal and external positions
- Fiscal balance:
  - Fiscal surplus in 2024: 3.3 percent of GDP (noted as lower-than-previously estimated due to accelerated investments and lower dividends from Energy Development Oman).
  - Projected average fiscal surplus during 2025–2026: 0.5 percent of GDP
  - Medium-term: surplus expected to increase, supported by oil production resumption and continued fiscal reforms.
- Public and SOE debt:
  - Central government debt: 35.5 percent of GDP in 2024 (down from 37.5 percent in 2023).
  - State-owned enterprises (SOE) debt: around 31 percent of GDP in 2024.
- External balance:
  - Current account balance: surplus of 2.2 percent of GDP in 2024.
  - Projected average current account balance in 2025–2026: deficit of about 2 percent of GDP.
  - Conditional outlook: return to surplus expected thereafter if oil production gradually rises to capacity.
- Factors weighing on fiscal and external positions: lower oil prices and softer growth in nonhydrocarbon exports.

### Financial sector and credit conditions
- Banking sector soundness:
  - Supported by strong asset quality, ample capital and liquidity ratios, and sustained profitability.
  - Banks’ net foreign asset position remains positive.
  - Private sector credit growth continues to be strong, underpinned by an expanding deposit base.
- Risks to liquidity and credit:
  - Higher-for-longer global interest rates and tighter-than-expected domestic liquidity—from subdued hydrocarbon revenues—could increase borrowing costs and reduce credit to the private sector.

### Risks and scenario considerations
- Downside risks (tilted to the downside):
  - Direct impact of global trade tensions expected to be limited given Oman’s modest exports to the U.S., but indirect effects could be more pronounced.
  - Persistently high global uncertainty may dampen oil demand and prices, potentially triggering an extension of oil production cuts and sustained lower hydrocarbon proceeds.
  - Weaker hydrocarbon proceeds would weaken growth and fiscal and external positions.
  - Higher global interest rates and tighter domestic liquidity could further slow nonhydrocarbon growth.
- Upside scenario:
  - Accelerated reform implementation under Oman Vision 2040 would strengthen Oman’s outlook.

### Structural reforms and policy implementation
- Tax and administration:
  - Oman Tax Authority making steady progress on its Tax Administration Modernization Program.
- Monetary and liquidity management:
  - Central Bank of Oman (CBO) further refining its liquidity management framework.
- Financial development:
  - Financial development agenda proceeding with initiatives to expand access to finance.
- SOE reforms and investment vehicles:
  - SOE reforms advancing with tangible improvements in governance, profitability, and risk management.
  - Future Fund Oman has launched operations, with numerous projects selected for funding and substantial capital mobilized from private sector investors.
- Energy and diversification:
  - Efforts to develop the renewable energy sector are underway, including work to foster green hydrogen investment and production.
  - The 11th Five-Year Development Plan for 2026-2030 is being finalized with the overarching goal of accelerating economic diversification.

### Concluding remarks
- IMF staff thanked Omani authorities and other counterparts for open and productive discussions and warm hospitality.
- Mission contact: Mr. César Serra led the IMF staff team during May 21-29, 2025.

*Statement issued by IMF staff at the conclusion of the May 21-29, 2025 mission to Muscat, Oman.*

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## References

- [Oman and the IMF](http://www.imf.org/external/country/OMN/index.htm)
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_Source: https://www.imf.org/en/news/articles/2025/06/02/pr-25172-oman-imf-staff-concludes-staff-visit_