Overview
Comparing Oman’s economic position in 2020 and 2025 reveals the impact of the pandemic, the oil price recovery, and the initial results of Vision 2040 reforms. This five-year window captures a period of significant structural change.
Oman’s Economy in 2020
In 2020, Oman faced a triple shock: the COVID-19 pandemic, an oil price collapse to below USD 20 per barrel, and pre-existing fiscal deficits. GDP contracted by approximately 3.4 percent, unemployment rose, and the fiscal deficit widened sharply. The government responded with emergency spending and accelerated fiscal reforms, including VAT implementation in April 2021. Credit ratings were downgraded to near junk status.
Oman’s Economy in 2025
By 2025, Oman’s economy has recovered substantially. GDP has grown, supported by higher oil prices and non-oil sector expansion. Fiscal reforms have lowered the breakeven oil price significantly. Credit ratings have been upgraded, and public debt as a percentage of GDP has declined. Non-oil GDP growth has been driven by manufacturing, logistics, tourism, and construction activity related to major projects at Duqm and Sohar.
Key Differences
The five-year period saw Oman move from crisis to recovery and reform. Fiscal discipline has tightened, the tax base has broadened with VAT, and subsidies have been targeted more efficiently. Non-oil revenues have grown as a share of total government income. Employment patterns have shifted with increased Omanisation and growing female workforce participation.
Verdict / Bottom Line
The 2020-to-2025 period demonstrates Oman’s capacity for reform under pressure. The challenge now is maintaining reform momentum during a period of relative fiscal comfort. The structural improvements achieved must be locked in and deepened to ensure Oman is resilient to future oil price downturns.