Oman’s economy has entered 2026 on a relatively steady footing, supported by continued growth in non-oil sectors and stable inflation, even as lower oil prices and a sharply narrower trade surplus point to rising external pressures.

Early indicators for the first quarter show inflation averaging 1.69 per cent in January and February, suggesting that price levels remain well contained, according to the Ministry of Economy’s March 2026 Economics Brief. Oil prices, however, have softened. The average crude price stood at $63.3 per barrel by the end of February, down 13.1 per cent compared with the same period last year.

External indicators reflect this shift. Oman’s trade surplus narrowed significantly to RO 255.9 million by the end of January, a decline of 51.5 per cent year-on-year. At the same time, imports rose 10.9 per cent to RO 1.58 billion, pointing to steady domestic demand. Non-oil Omani exports also increased 15.3 per cent to RO 613 million, underlining continued activity in the non-oil economy.

Investment trends were mixed. Total foreign direct investment reached RO 31.38 billion by the end of 2025, up 8.1 per cent, but inflows declined 33.7 per cent to RO 2.36 billion, indicating a slowdown in new capital entering the market.

The latest available GDP data — providing a baseline for early 2026 — shows the economy expanded 2.4 per cent at constant prices by the end of Q4 2025 to RO 39.30 billion. Growth continues to be driven mainly by non-oil sectors, which expanded 3.1 per cent to RO 28.70 billion, compared with 1.1 per cent growth in petroleum activities, which reached RO 12.02 billion.

Taken together, the data suggests Oman’s economic momentum remains anchored in non-oil expansion and stable domestic conditions, although weaker oil markets, softer investment inflows and a narrowing trade balance may weigh on the outlook in the months ahead.

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