Oman’s 2025 Budget Deficit Narrows as Energy Revenue Supports Fiscal Performance
Oman ended 2025 with a smaller than planned budget deficit, as stronger oil and gas revenue lifted public income above the approved budget and helped offset higher spending, according to final budget figures released by the Ministry of Finance.
Public revenue reached about RO 12.122 billion, equivalent to roughly US$31.5 billion, around 8 percent above the approved budget estimate of RO 11.18 billion. Oil and gas revenue rose to about RO 8.481 billion, around 11 percent above budget, supported by a realized oil price of about US$72 a barrel compared with the US$60 assumption in the budget, as well as stronger gas revenue. Non oil revenue reached about RO 3.641 billion, while actual public spending rose to roughly RO 12.583 billion, around 7 percent above the approved budget.
The general budget recorded a deficit of about RO 461 million, equivalent to roughly US$1.2 billion, compared with a budgeted deficit of about RO 620 million, a narrowing of around 26 percent. Total public debt stood at about RO 14.6 billion at the end of 2025, broadly stable compared with 2024, with the Ministry of Finance indicating that financing needs were met alongside liability management operations without a material increase in the overall debt stock.
Why it matters
The figures point to continued improvement in Oman’s public finances and reinforce the country’s fiscal consolidation story. Higher hydrocarbon revenue was the main driver of the 2025 outperformance, but the broader message also rests on expenditure control, active debt management and a conservative budget framework.
This matters for Oman’s credit profile. The sultanate returned to investment grade with major rating agencies over the past year, with Moody’s raising the rating to Baa3 and S&P at BBB minus, both with stable outlooks, supported by stronger fiscal metrics and lower debt vulnerability. A narrower deficit and broadly stable public debt give the government more room to fund Oman Vision 2040 priorities, including logistics, tourism, manufacturing, energy transition projects and private sector development, while maintaining a buffer against oil price volatility.
For the wider Gulf, Oman’s 2025 result fits a regional pattern of cautious budgeting, active debt management and gradual fiscal consolidation. GCC governments continue to pursue large investment programmes, but stronger fiscal frameworks and more predictable public finances remain central to the region’s appeal for sovereign debt investors, project finance lenders and long term institutional capital.
Outlook
Oman’s fiscal performance in 2026 will depend heavily on energy prices, non oil revenue growth and spending discipline. The conservative oil price assumption leaves scope for positive surprises if realized energy prices stay above the planning benchmark, but the underlying test will be whether non oil revenue and private sector led growth can keep strengthening the fiscal base.
The key indicators to watch are the pace of non oil revenue expansion, the execution of Oman Vision 2040 projects, subsidy and development spending, and the trajectory of public debt. Sustained discipline across these areas would support the improvement recorded in 2025 and strengthen Oman’s fiscal resilience over the medium term.
Sources: Oman Ministry of Finance; Oman News Agency.
