MUSCAT - The Oman Economic Association (OEA) held a meeting on Tuesday with a delegation from the International Monetary Fund (IMF) as part of the 2025 Article IV Consultations. The discussions focused on Oman’s fiscal policies, recent economic developments and the medium-term outlook, along with the government’s broader efforts to strengthen fiscal sustainability and support private-sector growth.

The meeting also reviewed the Medium-Term Fiscal Framework, initiatives to expand non-oil revenues, measures to enhance spending efficiency, the public debt management strategy and the mechanisms used to identify and mitigate fiscal risks. The role of the financial sector in enabling private-sector expansion and supporting economic diversification featured prominently in the dialogue.

These consultations form part of the IMF’s annual engagement with its 191 member countries under Article IV of the Fund’s Articles of Agreement. Through these missions, the IMF evaluates policy performance, monitors emerging risks and provides recommendations designed to safeguard macroeconomic stability.

Dr Khalid bin Said al Amri, Chairman of the Oman Economic Association (OEA), emphasised the significance of this annual process, noting that hosting the IMF delegation underscores OEA’s role as an independent intellectual platform contributing to national economic dialogue. He explained that the meeting allowed for a comprehensive review of Oman’s fiscal path, the latest economic indicators and the structural reforms underway to sustain long-term growth.

Dr Al Amri highlighted the importance of the Medium-Term Fiscal Framework and the government’s efforts to enhance fiscal resilience by broadening the non-oil revenue base, improving spending efficiency and strengthening debt and risk-management capacities. He stressed that maintaining open and transparent dialogue with international institutions adds value to policy formulation and supports Oman’s long-term development objectives under Oman Vision 2040.

Speaking during the meeting, Abdullah al Hassan, IMF Mission Chief for Oman and Afghanistan, stated that this year’s consultations take place at a time when the Omani economy has demonstrated strong resilience to global economic shocks, regional geopolitical tensions and fluctuations in oil prices. Despite these pressures, Oman’s non-oil economy expanded by 3.5 per cent last year and is expected to continue growing at a similar pace this year. He noted that Oman’s fiscal position remains positive, with budget performance and surpluses staying within healthy levels and that foreign direct investment inflows continue to rise despite a global decline in such investments. Most FDI is directed towards gas-related sectors, while the narrowing of sovereign spreads reflects increasing investor confidence in Oman’s economic outlook and policy framework.

Al Hassan explained that the overarching theme of the 2025 consultations is strengthening economic resilience and accelerating transformation amidst increasing global volatility. He noted that the mission is examining the flexibility of Oman’s fiscal reforms, the strengthening of the monetary policy framework, the development of capital markets and the structural reforms necessary to support long-term transformation.

He pointed to global modelling results suggesting that Oman could raise its productivity by around 1 per cent over the next five years through increased adoption of artificial intelligence — significantly higher than projections for emerging economies.

On the subject of sustainability, Al Hassan stated that simulation exercises conducted by the IMF assess the potential effects of policy adjustments, including changes to fuel subsidies. One scenario indicates that redirecting part of the subsidy savings to support eligible households, while allocating the remainder to capital spending, private-sector development and climate-resilience initiatives, could increase Oman’s GDP by up to 7 per cent above baseline levels by 2040.

He emphasised that successful economic transformation requires not only diversifying domestic production but also enhancing the structure, value and competitiveness of national exports. Comparative international studies undertaken by the IMF — drawing on examples such as Singapore, Korea and Malaysia — offer insights that Oman could effectively build upon.

Al Hassan concluded by noting that the mission is continuing its analytical work ahead of the final report, with the key objective of incorporating local viewpoints and supporting Oman’s efforts to accelerate economic transformation and strengthen its resilience to global uncertainties.

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