Oman’s GDP grows 5.1% in Q2 as oil leads growth and diversification drives private-sector jobs

Oman’s real gross domestic product (GDP) grew 5.1% year-on-year in the second quarter of 2026, driven by a strong expansion in the oil sector, while slower growth in non-oil activities highlighted the continued challenge of diversifying the economy.

According to research reports from Ubhar Capital, real GDP reached approximately RO 9.9 billion in Q2 2026, while GDP eat current prices stood at around RO 12.9 billion. For the first half of the year, real GDP totalled approximately RO 19.5 billion, representing year-on-year growth of 3.8%.

The figures come as Oman pursues economic diversification under Oman Vision 2040 and its 11th Five-Year Development Plan, with the government seeking to expand non-oil industries, attract investment and strengthen private sector participation.

The oil sector was the primary driver of economic expansion in Q2, recording growth of 14.7% year-on-year and 12.4% quarter-on-quarter. Crude oil production increased by 15.2% year-on-year, while natural gas production rose 11.7%.

In contrast, non-oil activities recorded more moderate growth of 0.7% year-on-year and declined 1.1% quarter-on-quarter during the period.

The divergence highlights the Omani economy’s continued dependence on hydrocarbons and the importance of broadening its sources of growth to reduce exposure to fluctuations in global energy markets.

Forecasts from S&P Global Ratings point to continued improvement in Oman’s financial indicators. The agency projects a general government budget surplus equivalent to 4.8% of GDP in 2026, easing to 2.2% in 2027.

Real GDP is forecast to grow by 3.5% in 2026, while the public debt-to-GDP ratio is expected to decline to 30.2%. Oman is also projected to maintain a current account surplus, reflecting an improvement in its external financial position.

Oman’s 11th Five-Year Development Plan, the second implementation phase of Oman Vision 2040, aims to strengthen non-oil sectors, improve investment efficiency, expand private sector participation and create a more competitive business environment.

Manufacturing, logistics, tourism, mining, fisheries, renewable energy, and financial and technical services have been identified as important areas for expanding production, generating domestic value and increasing exports.

The private sector is also expected to play a greater role in economic activity and employment generation as Oman seeks to reduce its reliance on public spending as a primary growth driver.

Developing capital markets and financial services will be important to this transition, helping businesses access funding, widening the investor base and directing domestic savings towards productive investments.

The International Monetary Fund has highlighted the importance of continued structural reforms to support sustainable growth, including financial sector development, improvements to the business environment, stronger institutions, digital transformation and renewable energy.

Expanding higher value-added non-oil exports is another priority as Oman seeks to reduce its vulnerability to oil price fluctuations.

The longer-term challenge will be to translate investment and economic growth into higher productivity, stronger non-oil output, export capacity and quality employment opportunities. The pace of diversification will be a key measure of Oman’s progress towards building a more resilient economy under Vision 2040.