Standard Chartered lifts Oman fiscal surplus forecast to 4.6% of GDP

Summary

• Standard Chartered sees Oman's GDP growing 3.5% in both 2026 and 2027.
• The bank raised its 2026 fiscal surplus forecast to 4.6% of GDP from 0.5%.
• Stronger balances position Oman as investors redraw regional supply chains and trade routes.

The latest

Oman's fiscal surplus is now projected at 4.6% of GDP in 2026, nine times Standard Chartered's previous 0.5% estimate, according to a report carried by Oman Daily Observer. The bank kept growth at 3.5% for both 2026 and 2027, citing resilient non-oil activity and a positive contribution from hydrocarbon output.

Details

• The growth call: Standard Chartered forecasts Omani GDP expansion of 3.5% in 2026 and the same rate in 2027, according to the report. The bank attributes the pace to non-oil activity holding up alongside a positive contribution from hydrocarbon production, rather than to a single sector rebound.
• The fiscal revision: The surplus forecast was lifted to 4.6% of GDP in 2026 and 3.6% in 2027, from earlier projections of 0.5% and 1.0% respectively. That is one of the sharpest upgrades in the report, and the bank did not set out which revenue or spending assumptions changed.
• Debt trajectory: Public debt is expected to decline to roughly 33% of GDP by end-2026 and 31% by end-2027, according to the bank's projections. The figures point to continued deleveraging rather than a one-off improvement tied to a single fiscal year.
• External accounts: The current-account surplus is forecast at 5.0% of GDP in 2026 and 3.4% in 2027, against previous estimates of 1.0% and 1.5%. The upgrade tracks the fiscal revision, suggesting a broader reassessment of Oman's external position.
• Non-oil drivers: The bank identifies logistics, manufacturing and continued public investment linked to Oman Vision 2040 as the anchors of non-oil growth. It expects that momentum to be sustained across the forecast horizon rather than fading after 2026.
• The executive line: Hussain al Yafai, chief executive and head of coverage at Standard Chartered Oman, said the sultanate is entering the next phase of its development from a stronger economic position, with improving fiscal and external balances providing a firmer foundation for investment in diversification sectors.
• Supply-chain factor: The report ties expected investment momentum to international investors reassessing regional supply chains and seeking more secure trade routes during the Iran war. Oman's location, neutral diplomatic posture and limited exposure to direct conflict spillover are cited as reinforcing the value of its ports and industrial zones.
• Where the money goes: Standard Chartered expects investment to strengthen across logistics, manufacturing, re-export activity and energy-linked infrastructure. Al Yafai framed Oman's advantage as increasingly about connectivity as much as resilience, positioning it for long-term capital as companies rethink trade routes.
• Also: Oman's public debt is projected to fall toward 31% of GDP by end-2027.

Background

Oman Vision 2040 is the sultanate's long-term diversification programme, aimed at reducing dependence on hydrocarbon revenue through investment in logistics, manufacturing and industrial zones. The bank's forecasts position the current fiscal improvement as underwriting that agenda rather than substituting for it.

Between the lines

The upgrade is concentrated in the balance-sheet measures, not the growth rate: GDP stays at 3.5% while the fiscal and current-account surpluses are revised up several times over. That pattern suggests the bank is repricing Oman's financial position rather than its output. The supply-chain argument, as the report presents it, treats regional disruption as a factor working in Oman's favour through its ports and neutral posture.

What's next

Watch Oman's published budget outturn for 2026 against the 4.6% surplus projection, debt issuance plans as the ratio approaches 33%, and any announced investment commitments in port, logistics or re-export capacity.

Source: Oman Daily Observer via Zawya