Overview
Oman’s achievement of three consecutive fiscal surpluses from 2022 through 2024 represents an unprecedented period of budgetary strength that has transformed the Sultanate’s fiscal credibility. This remarkable turnaround from the deficit years of 2015 to 2021 reflects the cumulative impact of structural reforms, improved revenue administration, expenditure discipline, and supportive oil market conditions. The consecutive surpluses have enabled debt reduction, reserve accumulation, and enhanced sovereign creditworthiness.
Key Points
Each successive surplus has been driven by an improving mix of oil and non-oil revenues, with the latter growing as a share of total income. Government spending has been held below revenue growth through efficiency measures and programme prioritisation. Debt management has shifted from crisis-mode borrowing to strategic liability management, with early repayment of expensive debt tranches. The Oman Future Fund has received significant capitalisation from surplus allocations. Foreign exchange reserves have strengthened, reinforcing confidence in the currency peg.
Current Status
Credit rating agencies have upgraded Oman multiple times during the surplus period, with positive outlooks signalling potential further improvements. Sovereign bond yields have declined, reducing the cost of capital for the entire economy. Government officials have cautioned that surpluses should not lead to complacency, emphasising the need for continued reform regardless of oil prices. The fiscal framework includes countercyclical provisions to manage periods of lower oil prices.
Vision 2040 Context
The three consecutive surpluses demonstrate that Vision 2040’s fiscal strategy is delivering results. This achievement builds the credibility and financial capacity needed to pursue long-term transformation investments. By maintaining fiscal discipline even during favourable conditions, Oman creates resilience against future price shocks and establishes a foundation for sustainable development that does not depend on the commodity cycle.