Strategic Direction
A Dynamic Economic Leadership with Renewed Capabilities Operating within an Integrated Institutional Framework
Strategic Direction
A Dynamic Economic Leadership with Renewed Capabilities Operating within an Integrated Institutional Framework.
Economic leadership is the enabling infrastructure of Vision 2040 — the macroeconomic framework, institutional architecture, and policy coordination mechanisms within which all other economic priorities operate. Without credible economic management, diversification strategies fail, investors lose confidence, and fiscal pressures overwhelm reform programmes.
Performance Indicators
| Indicator | Baseline | 2030 Target | 2040 Target |
|---|---|---|---|
| Global Competitiveness Index | 64.4 / Rank 47 (2018) | >71 / Top 30 | >76.6 / Top 20 |
| Regulatory Quality, WGI | 0.42 / Rank 67 (2017) | >1.23 / Top 30 | >1.44 / Top 30 |
| Real GDP Growth | 3.6% avg (2000-2017) | 5% | 5% |
| Inflation Rate (CPI) | 1.6% (2017) | 2%-3% range | 2%-3% range |
| Fiscal Balance (% GDP) | -11.7% (2017) | Does not exceed -3% | Surplus territory |
2025 Progress: The Fiscal Turnaround
The most significant achievement under this priority has been the fiscal turnaround. Oman achieved a budget surplus for the third consecutive year in 2024 — a remarkable reversal from the -11.7% GDP deficit of 2017.
This transformation was driven by:
- Higher oil prices through 2022-2023
- Expenditure rationalisation and subsidy reform
- Non-oil revenue growth (VAT implemented 2021, excise taxes, non-tax revenues)
- Disciplined debt management
Fiscal balance (% GDP):
- 2017: -11.7% (baseline)
- 2022: +1.5% (first surplus)
- 2023: +2.0%
- 2024: +2.8% (estimated)
Gross public debt: Declining to approximately 35% of GDP from the 44% baseline — creating meaningful fiscal headroom.
Credit rating: Oman’s sovereign credit rating has been upgraded by major agencies, reflecting the improved fiscal position and economic management credibility.
Oman Future Fund
The launch of the Oman Future Fund in 2024 with initial capital of OMR 2 billion (approximately $5.2 billion) represents a strategic use of improved fiscal capacity. The fund is designed to invest in Vision 2040 priority sectors, creating an additional vehicle for economic transformation beyond traditional government capital expenditure.
Inflation Management
Inflation has remained at healthy levels, well within the 2-3% target range. This reflects both prudent monetary policy by the Central Bank of Oman (maintaining the OMR-USD peg at 0.3845) and global price moderation in 2024.
The peg to the US dollar constrains Oman’s monetary policy independence but provides exchange rate stability that benefits trade and investor confidence.
Real GDP Growth Challenge
The 5% real GDP growth target remains challenging. Oman’s 2023 growth was approximately 1.1% (IMF estimate), constrained by lower oil production under OPEC+ agreements and subdued global demand. Non-oil growth has been stronger, supporting the diversification trajectory, but not sufficient to drive headline GDP growth to the 5% target.
Key Institutions
Ministry of Finance, Ministry of Economy, Central Bank of Oman, Supreme Council for Planning, Oman Vision 2040 IFU.