Oman has announced a $30.9 billion (OMR 11.8 billion) budget for 2025, aiming to balance economic growth, social welfare, and fiscal stability. Projected revenues stand at $29.2 billion (OMR 11.18 billion), based on an oil price assumption of $60 per barrel. The budget outlines a deficit of $1.6 billion (OMR 620 million), to be funded by $572 million (OMR 220 million) in borrowing and $1.04 billion (OMR 400 million) in reserve withdrawals.
Oil revenues are expected to account for 52% of total revenue, with gas contributing 16% and non-oil revenues 32%, according to Finance Minister Sultan bin Salim Al Habsi, who presented the budget in Muscat.
Increased social and infrastructure spending
Oman has allocated $13 billion (OMR 5.004 billion) for social services—a 4.2% increase over 2024—including education, healthcare, housing, and social welfare. Additionally, $4.1 billion (OMR 1.58 billion) has been earmarked for subsidies, including $1.5 billion (OMR 577 million) for social protection and $1.35 billion (OMR 520 million) for electricity support.
Under the decentralisation plan, $52 million (OMR 20 million) has been allocated to each governorate annually. By the end of 2024, 68% of the allocated $382 million (OMR 147 million) had been committed to local development projects.
The budget emphasises housing initiatives, with plans to assist 1,200 households and complete the first phase of Sultan Haitham City. Major infrastructure projects for 2025 include expansions of the Muscat Expressway, the Khasab-Daba-Lima Road, and the Al Sharqiyah Expressway.
Development Bank and SME boost
The Development Bank will receive a $208 million (OMR 80 million) capital injection to support value-added projects. By November 2024, the bank had disbursed $720 million (OMR 277 million) across 22,000 loans, marking a 34% portfolio increase since mid-2023.
Oman Housing Bank’s lending portfolio grew by 23% over two years, reaching $2.2 billion (OMR 855 million) by the end of 2024.
Key development initiatives
The education sector will see the construction of 20 new schools and issuing tenders for 22 additional schools. Over 56,000 students will benefit from scholarship programs, including 150 participants in the “Oman Pioneers” initiative.
In healthcare, nine hospitals, including Sultan Qaboos Hospital in Salalah and Suwaiq Hospital, are scheduled for completion. New projects include a National Center for Women’s Health and a National Center for Virtual Health.
Tourism initiatives include completing the Omani Botanical Garden and developing the Ashkhara waterfront. Ports and dams, including Wadi Al-Zuhaimi Dam and Mahout Port, are also part of the 2025 development pipeline.
2024 Fiscal Performance
Preliminary data shows that Oman’s GDP grew by 1.9% in the first three quarters of 2024, reaching $73 billion (OMR 28.1 billion). Inflation eased to 0.6% in November 2024, down from 1.1% a year earlier, due to government subsidies on key goods and services.
Foreign direct investment rose by 16% to $69.3 billion (OMR 26.7 billion) by the end of Q3 2024. The 2025 budget projects GDP to reach $102.3 billion (OMR 39.4 billion) by year-end.
Oman reported a fiscal surplus of $1.4 billion (OMR 540 million) for 2024, compared to a projected deficit of $1.66 billion (OMR 640 million). Revenues reached $32.9 billion (OMR 12.67 billion), driven by an average oil price of $82 per barrel. Public spending totalled $31.5 billion (OMR 12.13 billion), exceeding the approved budget due to increased social and economic stimulus spending.
The government reduced public debt by $2.1 billion (OMR 800 million) to $37.4 billion (OMR 14.4 billion) in 2024, lowering the debt-to-GDP ratio to 34%. External loan repayments totalled $922 million (OMR 355 million), while $1.56 billion (OMR 600 million) in domestic bonds were retired. New bond issuances amounted to $1.83 billion (OMR 705 million) in line with the borrowing strategy.
Private sector initiatives
The 2025 budget allocates $130 million (OMR 50 million) for private sector job creation. In 2024, SMEs secured 12% of government contracts, with 467 tenders awarded. An additional $65 million (OMR 25 million) agreement was signed to enhance SME lending and support entrepreneurial growth.
Oman’s Ministry of Finance will launch “Maliya,” a unified financial management system, in 2026, with full implementation by 2030. The platform aims to improve resource allocation and transparency, aligning with the country’s Oman 2040 vision.
Al Habsi emphasised that the 2025 budget aims to “provide financial stability, maintain economic growth, and support citizens while enhancing transparency and efficiency.”