Overview
Oman’s economic outlook for 2025 reflects continued progress in diversification, fiscal reform, and investment-led growth, set against a backdrop of evolving global energy markets and geopolitical dynamics. GDP growth is expected to be supported by non-oil sector expansion, infrastructure investment, and the development of new industries including green hydrogen and tourism. Fiscal consolidation efforts are projected to continue, with revenue diversification and expenditure discipline contributing to improved fiscal balances. The outlook is subject to risks including oil price volatility, global economic slowdown, and the pace of structural reform implementation. Understanding the macroeconomic trajectory and key investment themes is essential for strategic planning and capital allocation decisions.
Key Facts
Real GDP growth is forecast to be positive, driven by both hydrocarbon and non-hydrocarbon sector contributions. Non-oil GDP growth is expected to outpace overall growth, reflecting the success of diversification initiatives. Inflation is projected to remain subdued, supported by the currency peg and stable global commodity prices. The fiscal deficit is expected to narrow further as VAT revenues stabilise and expenditure management continues. Foreign direct investment inflows are projected to increase, attracted by green hydrogen, logistics, and tourism opportunities. The labour market is expected to see continued growth in private sector employment for Omani nationals.
Regulatory Framework
Economic policy is guided by the Vision 2040 Implementation Follow-up Unit and the Supreme Council for Planning. The annual budget sets the fiscal parameters for government spending and investment priorities. Monetary policy remains anchored by the currency peg, with interest rates tracking US Federal Reserve decisions. Structural reforms in labour markets, business regulation, and social insurance continue under the medium-term reform agenda. Investment promotion policies are being refined to focus on priority sectors and high-impact projects.
Opportunities
Green hydrogen and renewable energy represent the most significant emerging investment themes. Tourism sector growth creates opportunities across hospitality, travel services, and destination development. Logistics and trade sector expansion is supported by infrastructure investment and free zone development. Digital economy initiatives drive demand for technology, fintech, and e-commerce services. Government privatisation and PPP programmes provide opportunities to acquire and develop public sector assets.
Considerations
Oil price assumptions underlying economic forecasts carry significant uncertainty. Global economic conditions, including growth in key trading partner economies, affect Oman’s export and investment prospects. The pace of structural reform implementation may vary from announced timelines. Geopolitical developments in the region can affect investor sentiment and economic performance. Investors should maintain flexible strategies that can adapt to both upside and downside scenarios relative to the base case outlook.