IMF lowers Oman's GDP growth forecast to 2.3% for 2025

29/04/2025 06:27 AST

The International Monetary Fund (IMF) has revised down its real GDP growth forecasts for the GCC countries, including Oman, as well as for the wider Middle East and North Africa region. The downward revision largely reflects the indirect and modest impact of ongoing global trade tensions and a subdued outlook for oil prices.

In its April World Economic Outlook, the IMF lowered Oman's real GDP growth forecast for 2025 by 80 basis points to 2.3%, down from 3.1% projected in October last year. The sultanate's growth forecast for 2026 was also cut by 80 basis points, to 3.6% from previous forecast of 4.4%.

In its Article IV Consultation Staff Report, published in January, the IMF noted that Oman's economic outlook remains 'favourable' due to robust oil revenues and ongoing structural reforms. The Fund projected that non-oil sectors will drive Oman's overall growth in the medium term, supported by significant private sector investment.

Across the GCC, the IMF downgraded Saudi Arabia's 2025 GDP growth forecast by 160 basis points to 3.0%, and by 70 basis points for 2026 to 3.7%. Kuwait's 2025 forecast was reduced by 140 basis points to 1.9%. The UAE is now expected to grow by 4.0% in 2025, a reduction of 110 basis points. Bahrain's projected growth stands at 2.8%, following a 40 basis point downgrade. In contrast, Qatar's GDP forecast for 2025 was revised upwards by 50 basis points to 2.4%.

Looking ahead to 2026, Qatar is expected to be the fastest-growing economy in the GCC, with a growth rate of 5.6%, despite a 20 basis point downward revision. The UAE follows with projected growth of 5.0%, while Saudi Arabia is forecast to expand by 3.7%. Kuwait and Bahrain were the only GCC countries to receive upward revisions for 2026, by 60 and 10 basis points respectively, bringing their forecasts to 3.1% and 3.0%.

For the MENA region as a whole, the IMF revised down its growth projections by 90 basis points for 2025 to 2.6%, and by 50 basis points for 2026 to 3.4%.

Speaking at a press briefing last week, Jihad Azour, Director of the IMF's Middle East and Central Asia Department, said, "In the MENA region, conflicts continue to weigh on growth in some oil-importing countries, while extended OPEC+ voluntary production cuts are dampening activity in oil-exporting economies. For GCC countries, strong non-oil growth and diversification efforts have been largely offset by oil production cuts."

He said that regional growth expectations have been revised down compared to the IMF's October 2024 Regional Economic Outlook, due to weaker global growth and the limited but noticeable effects of persistent trade tensions.

"Regarding the GCC, the direct impact of the trade shock has been limited. However, the prospect of declining oil prices arises at a time when oil production is increasing only gradually, following the implementation of the December OPEC+ agreement," Azour added.

The IMF now anticipates the average price of crude oil to be $66.94 per barrel in 2025 and $62.38 in 2026.

Muscat Daily