Analysis of Oman’s State Budget 2026

The 2026 budget marks the first year of Oman’s Eleventh Five-Year Development Plan (2026–2030), which is aligned with Oman Vision 2040 and aims to foster a diversified, competitive, and sustainable economy. It underscores Oman’s commitment to achieving a minimum economic growth rate of 3%, enhancing fiscal sustainability and debt management, strengthening social protection, and advancing digital transformation and economic diversification, while maintaining resilience against global uncertainty.

The budget emphasizes prudent fiscal policies while prioritizing investment in key sectors such as education, health, housing, and infrastructure. Consistent with prior years’ budget plans, it aspires to achieve a balance between maintaining fiscal sustainability and stimulating economic growth, and rationalizing public spending while continuing to finance priority developmental projects and social welfare.

Preliminary results of 2025

Actual revenues at OMR 11.8 billion increased by 5.2% compared to the budgeted revenue of OMR 11.2 billion because of:

Increase in oil revenues by 10% at OMR 6.4 billion (average oil price realized was USD 70/bbl compared to the budgeted price of USD 60/bbl)
Increase in gas revenue of 0.4% at OMR 1.8 billion

Public spending at OMR 12.2 billion increased by 3.7% compared to the budgeted expenses of OMR 11.8 billion because of:

Increase in development expenditure by 29% (OMR 1.2 billion compared to budgeted expenditure of OMR 900 million)
Increase in subsidies for oil products, electricity, water and sewage sectors and social spending

At the end of 2025, Oman is expected to record a deficit of OMR 480 million, a 23% decrease compared to a budgeted deficit of OMR 620 million. The deficit is covered through borrowing and withdrawals from reserves.

Public debt management, disciplined borrowing policies and liability management have resulted in a public debt of OMR 14.6 billion at the end of 2025 compared to OMR 14.4 billion at the end of 2024. Debt to GDP ratio increased to 35.7% in 2025 compared to 34% in 2024.

Improvements in Oman’s credit ratings/outlook by credit rating agencies:

– Moody’s upgraded Oman’s credit rating to “Baa3” from “Ba1” and revised the outlook to investment grade with a stable outlook in July 2025.

– S&P Global Ratings affirmed Oman’s credit rating of “BBB-” with a stable outlook in April and September 2025.

– Fitch upgraded Oman’s credit rating to “BBB-” from “BB+” and revised the outlook to investment grade with a stable outlook in December 2025.

GDP at constant prices increased by approximately 2.2% to OMR 28.7 billion at the end of September 2025 compared to the same period in 2024 (according to the National Centre for Statistics and Information), mainly owing to an increase in value added in non-oil activities by 3.4% at the end of September 2025.
GDP at current prices increased by approximately 1.5% to OMR 31.07 billion at the end of September 2025 compared to the same period in 2024 (according to the National Centre for Statistics and Information).
Inflation increased to approximately 0.9% at the end of November 2025 compared to 0.6% at the end of the same period in 2024 (according to the National Centre for Statistics and Information). The global inflation rate in 2025 is estimated at 4.2% (according to the International Monetary Fund).
Trade balance recorded a surplus of OMR 4.7 billion at the end of October 2025.
Deposits in the banking sector grew by approximately 4.7% to OMR 33.1 billion at the end of September 2025.
Total credit granted by conventional commercial banks grew by 8%, reaching OMR 34.5 billion at the end of September 2025.
The market capitalization of the Muscat Stock Exchange reached OMR 32.2 billion and Muscat StockExchange index closed at 5,956 points as at 25 December 2025.