The Central Bank of Oman issues its annual report of 2025

Oman / The Central Bank of Oman issued its annual report for the year 2025 AD, which included a comprehensive assessment of the macroeconomic and financial developments in the Sultanate of Oman during the past year, in addition to growth prospects for the year 2026 AD. The report reviewed the local economic environment and trends in real economic activity, in addition to analyzing trends in inflation, financial conditions, transactions with the outside world, and the performance of the banking sector. The report confirmed that the macroeconomic environment in the Sultanate of Oman remained supportive of various sectors during the year 2025 AD; Economic activity continued to grow at a good pace despite external challenges, which provided the government with the necessary financial space to implement structural reforms. The report indicated the continuation of the investment program, which played a major role in growth, supported by continued progress in implementing strategic projects in both the public and private sectors. The report indicated that the inflation rate remained at low levels, which reflects the reliability of the exchange rate peg system and the stability of local conditions, while both the balance recorded

The fiscal and external account balance recorded a limited deficit, while public debt continued its downward path. The report stated that the real gross domestic product recorded a growth of 2.4 percent in 2025 compared to 1.6 percent in 2024, supported by the growth of oil and non-oil activities. The report pointed out that non-oil activities achieved during the past year a growth of 3.1 percent thanks to the continued expansion of the main sectors. The agriculture and fisheries sector recorded the highest growth rate of 10.2 percent, and this comes as a reflection of the ongoing efforts to enhance food security and increase local production, while construction activity recorded a growth of 2 percent, driven by continued investments and development projects. The services sector witnessed a remarkable growth of 3.1 percent during the year 2025 AD, benefiting from the strength of local demand and the expansion witnessed by the main service sectors. It is expected that economic activity in the medium term will record a noticeable increase supported by the continued expansion of non-oil sectors and the sustainability of activities.

The report confirmed that the inflation rate in the Sultanate of Oman remained at low levels, which reflects the effectiveness of the exchange rate peg system as a reliable nominal pillar, in addition to the limited transmission of global price pressures to the local economy. Average inflation reached 1.0 percent in 2025 compared to 0.6 percent in 2024, which indicates limited inflationary pressures at the local level. The rate remained within normal levels thanks to stable domestic demand conditions and close cooperation between fiscal and monetary policies. The financial position of the Sultanate of Oman maintained its solidity despite the decline in oil prices. The government was able to implement the provisions of the state’s general budget with remarkable effectiveness, while achieving the required balance between the goals of financial sustainability and continuing to strengthen investment programs and initiatives that support economic growth. The state’s financial account recorded a limited deficit amounting to 1.1 percent of the gross domestic product, and the public debt continued to decline, as the ratio of debt to gross domestic product decreased to 34.6.

percent in 2025, compared to 35.4 percent in 2024. The continued adjustment of public financial conditions and the strengthening of macroeconomic pillars also contributed to improving the sovereign creditworthiness of the Sultanate of Oman and restoring its credit rating within the investment category. The current account recorded a limited deficit amounting to 1.2 percent of the gross domestic product, and this is mainly due to the decrease in oil exports by 15 percent as a result of the decline in oil prices by 13 percent during the past year, in addition to the increase in demand for Imports related to major investment and development projects. Remittances from the expatriate workforce increased by 3.1 percent during the year 2025 AD, reflecting the continued expansion of economic activity and improved labor market conditions. The report confirmed that the financial account remained supportive of external stability through the continuation of foreign direct investment flows at stable levels, while portfolio investment flows abroad indicate an increase in the financial sector’s possession of foreign assets. The exchange rate peg system continued to perform.

Its role as an appropriate nominal pillar within the structure of the Omani economy, with its support for investor confidence and foreign direct investment flows. The report indicated that local monetary conditions are in line with developments in US monetary policy, and in parallel with the monetary easing conditions that were adopted in the United States of America and the requirements of the peg system, the Central Bank of Oman reduced the base interest rate to 4.25 percent by the end of December 2025. The Omani banking sector achieved success during the year 2025 AD. remarkable growth; The total assets of the banking sector increased by 9.2 percent to reach 44.6 billion Omani riyals by the end of December 2025. Total credit also increased to 35.3 billion Omani riyals, achieving a growth of 8.8 percent compared to 2024. The combined deposits with banks witnessed an increase of 7 percent to reach about 34 billion Omani riyals by the end of December. Credit granted to the private sector also increased by 6.8 percent, which... It reflects the continued demand for financing in various economic sectors

The report pointed out that the total non-performing loan ratio stabilized at 4.4 percent until December 2025, and banks maintained strong levels of capital, as the capital adequacy rate reached 18.8 percent, exceeding the regulatory minimum of 13.5 percent. Liquidity conditions remained comfortable, supported by the abundance of financing sources and adherence to regulatory requirements for liquidity. Regarding the macroeconomic expectations for the year 2026, the report indicated that real GDP growth is expected to accelerate to 4.0 percent in 2026, supported by the growth of the oil and non-oil sectors. The inflation rate is also expected to remain within appropriate levels, as the average inflation in the Sultanate of Oman is estimated at about 2.6 percent during the year 2026 AD, while containing it within low levels in light of the adoption of the system of pegging the exchange rate of the Omani riyal to the US dollar. The Sultanate of Oman is expected to achieve noticeable financial and external surpluses during the year 2026 in light of achieving high prices. Favorable oil, continued fiscal discipline and continued reforms

Structural. The report expects the surplus of both the fiscal balance and the current account balance to reach approximately 2.5 percent and 4.1 percent of the gross domestic product, respectively, as a result of the rise in oil revenues and the growth of non-oil exports. The report indicated that implementing the reform agenda within the eleventh five-year development plan (2026-2030) and the “Oman 2040” vision will remain essential for enhancing economic diversification and improving the competitiveness of the Sultanate of Oman within global markets, which will ensure support for local growth prospects in the long term. Average. The annual report of the Central Bank of Oman included 5 chapters: the current assessment and macroeconomic prospects, production, employment and prices, public finance, money, banks and financial institutions, and external sector developments.