The Decade in Context
The period 2015-2025 represents the most economically turbulent decade in Oman’s modern history. It began with the 2014-2016 oil price crash that exposed the Sultanate’s fiscal vulnerability, continued through the leadership transition from Sultan Qaboos to Sultan Haitham in January 2020, was devastated by the COVID-19 pandemic and associated oil price collapse in 2020, and then experienced fiscal recovery as oil prices rebounded from 2021 onward. This decade also saw the launch of Vision 2040, the introduction of VAT, and the beginning of Oman’s green hydrogen ambitions.
GDP and Growth Trajectory
Real GDP growth averaged approximately 1-2 percent annually over the decade, well below the 5+ percent rates of the 2000s boom years. Nominal GDP fluctuated dramatically with oil prices, falling from approximately OMR 27 billion in 2014 to OMR 24 billion in 2016, recovering, then plunging again in 2020 before recovering to record levels by 2022. Non-oil GDP growth was more stable at 2-3 percent annually but insufficiently fast to offset demographic pressures. GDP per capita declined in real terms over the decade when adjusted for population growth and inflation.
Fiscal Transformation
The fiscal story is one of crisis and reform. Government revenue fell by over 40 percent between 2014 and 2016. Budget deficits exceeded 15 percent of GDP in the worst years. Government debt surged from near zero to over 60 percent of GDP. Then, reform: VAT introduction (2021), subsidy rationalisation, expenditure control, and higher oil prices combined to restore fiscal balance by 2022. The fiscal breakeven oil price declined from over USD 90 to approximately USD 65 per barrel. Non-oil revenue approximately doubled as a share of total revenue.
Social Indicators
Social indicators showed mixed progress. Life expectancy continued rising. Educational attainment improved. Healthcare outcomes remained strong. However, real household incomes stagnated or declined for many middle-class families. Housing affordability worsened. Youth unemployment persisted despite various intervention programmes. The Gini coefficient, while not publicly reported in detail, is believed to have widened as economic disruption affected lower-income groups disproportionately. The social contract – the implicit exchange of economic security for political quiescence – came under strain.