IMF Staff Completes 2025 Article IV Mission to The Sultanate of Oman

IMF News, November 25, 2025

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Canonical URL: IMF Staff Completes 2025 Article IV Mission to The Sultanate of Oman

An IMF staff team, led by Mr. Abdullah AlHassan, conducted the 2025 Article IV consultation discussions in Muscat during November 9–24, 2025.
End-of-Mission press releases convey preliminary findings after a visit to a country. The views expressed are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board.
At the conclusion of the mission, Mr. AlHassan issued the staff statement published on November 25, 2025.

Economic expansion continued, supported by robust nonhydrocarbon activity.
Hydrocarbon GDP contracted in 2024 and the first half of 2025 due to OPEC+ production curbs.
Inflation:
- Eased to 0.6 percent in 2024.
- Remained contained at 0.9 percent during January-October 2025.
Fiscal and external positions:
- Fiscal balance posted a surplus of 3.3 percent of GDP in 2024.
- Current account recorded a surplus of 3.2 percent of GDP in 2024.
- Government debt stood at 36.1 percent of GDP by September 2025.
Nonhydrocarbon activity expansions cited: manufacturing, wholesale and retail, logistics, construction, and agriculture and fishing.
Banking sector described as strong and sound with ample capital and liquidity buffers and stable profitability.

Growth outlook:
- Projected to strengthen over 2025–26 as oil production cuts unwind and nonhydrocarbon activity continues to expand.
Inflation:
- Expected to stay low and converge toward 2 percent over the medium term.
Fiscal and external:
- Fiscal surpluses projected to persist.
- Current account projected to shift into deficit in 2025–27, driven mainly by lower oil prices, before gradually returning to surplus as oil production recovers toward potential capacity and nonhydrocarbon exports strengthen.
Risks:
- Heightened global uncertainty and renewed geopolitical tensions could weigh on growth and fiscal and external positions.

Staff assessment:
- Authorities remain committed to fiscal prudence.
- The nonhydrocarbon primary deficit is estimated to have narrowed by 2 percent of nonhydrocarbon GDP in 2025, supported by expenditure restraint and improved nonhydrocarbon revenue collection.
Recommended measures:
- Continue progress on tax administration modernization.
- Roll out VAT e-invoicing.
- Introduce a personal income tax on high-income earners in 2028.
- Rationalize non-essential current spending.
- Phase out untargeted energy subsidies, while protecting the most vulnerable.
- Strengthen the medium-term fiscal framework.
- Develop a sovereign asset–liability management framework.
Objective: Reinforce fiscal sustainability and enhance policy credibility.

Exchange rate peg:
- The peg remains appropriate and continues to anchor low and stable inflation.
Monetary Policy Enhancement Project measures highlighted:
- Introduce an Omani Rial standing deposit facility.
- Operationalize the interest rate corridor.
- Gradually transition to a full-fledged treasury single account.
Expected outcome: Strengthen monetary policy transmission.

Current status: Banking sector remains strong and sound.
Recommended actions to safeguard stability and support development:
- Strengthen the macroprudential framework.
- Enhance granularity of regulatory data and supervisory capacity.
- Improve the financial safety net and crisis management.
- Deepen capital markets to diversify financing sources for the private sector.

Progress: Reform implementation under Oman Vision 2040 is progressing.
11th Development Plan: Presents an opportunity to accelerate diversification, boost productivity, and create more private-sector jobs for Omanis.
Reform priorities:
- Advance labor market reforms.
- Improve the business environment and strengthen market competition to increase private sector participation.
- Enhance SME support.
- Deepen trade integration.
- Pursue renewables initiatives.
- Scale up the digital transformation, including AI readiness.

The IMF team expressed appreciation to the Omani authorities and counterparts for their cooperation, constructive discussions, and hospitality throughout the mission.

IMF staff statement, November 25, 2025.