Oman projects higher revenues and lower deficit in 2026 state budget

The Sultanate of Oman has projected total revenues of approximately RO11.447 billion in its General State Budget for 2026, based on an average oil price of US$60 per barrel. This represents a 2.4 per cent increase compared with the approved revenues for 2025, according to figures announced by the Ministry of Finance.

Total public expenditure for 2026 is estimated at around RO11.977 billion, up 1.5 per cent year on year. The resulting budget deficit is expected to stand at approximately RO530 million, a reduction of 14.5 per cent from the deficit approved for 2025. The deficit accounts for 4.6 per cent of total revenues and about 1.3 per cent of gross domestic product.

The figures were unveiled at a press conference held at the Ministry of Finance to present the financial framework for the Eleventh Five-Year Development Plan covering 2026 to 2030, alongside details of the 2026 budget and preliminary results for the 2025 fiscal year.

The Minister of Finance, Sultan Salim Al-Habsi, said Oman’s economic activity continues to expand. Real GDP is projected to reach around RO39.2 billion by the end of 2025, compared with RO34.5 billion in 2021, marking a growth of 14 per cent during the Tenth Five-Year Plan. Inflation has remained contained, averaging about 0.9 per cent up to November 2025, supported by government subsidies and price support measures.

FDI, public investment drive growth

Foreign direct investment (FDI) has also risen sharply, reaching RO30.3 billion by the third quarter of 2025, an increase of around 71 per cent compared with the same period in 2021. The Muscat Stock Exchange has recorded strong performance, with market capitalisation exceeding RO32.2 billion and trading values rising by more than 1,000 per cent compared with 2020.

Government investment vehicles have played a central role in this progress. Assets managed by the Oman Investment Authority grew to around RO21 billion by the end of 2025, while the Future Fund Oman approved investments in 164 projects with commitments totalling RO462 million.

Social spending remains a key priority. Funding for the social protection system will rise to about RO614 million in 2026, with more than 1.6 million citizens expected to benefit. Increased allocations have also been made for education, healthcare, housing, roads and governorate development projects.

Preliminary results for 2025 indicate general revenues of around RO11.760 billion and a reduced deficit of approximately RO480 million, supported by higher oil revenues.

Looking ahead, the government said any additional revenues generated by higher oil prices in 2026 will be used to cover the remaining deficit and reduce public debt, which is expected to stand at about RO14.6 billion, equivalent to 36 per cent of GDP.