Oman is advancing its economic transformation under Oman Vision 2040, a comprehensive strategy aimed at reducing the country’s dependence on oil and gas and fostering a diversified, technology-driven economy. The plan seeks to decrease hydrocarbons’ contribution to gross domestic product from approximately 30% today to 16% by 2030 and 8.4% by 2040, while promoting growth in sectors such as manufacturing, logistics, renewable energy, fisheries, mining, and services.

The initiative also prioritizes strengthening the private sector, which employed just over half of Omani workers in 2024, up from about one-third in recent years following labor market reforms. To meet the goal of creating more than 100,000 new jobs for nationals by 2040, private sector participation in the economy, currently a little over 50% of GDP, is expected to rise to 70%. This shift aims to build a more competitive and resilient economic base capable of sustaining growth as hydrocarbon revenue declines.

Economic indicators underscore the progress made so far. Oman’s economy expanded by 2.6% in 2025, driven largely by non-oil activities, with inflation averaging 0.9%, among the lowest in the Gulf Cooperation Council (GCC) region. Regulatory improvements and streamlined processes have attracted substantial foreign investment, with the United Kingdom emerging as the top investor in 2025 at $42 billion, followed by the United States and the United Arab Emirates. Additionally, ongoing digital transformation and education reforms are positioned to enhance competitiveness and better align workforce skills with emerging sectors.

A key partner in supporting Oman’s development goals is the World Bank Group (WBG), which has broadened its engagement over decades from technical cooperation to a multi-faceted partnership combining policy advice with private sector investment. Since establishing a new WBG Country Office in Muscat in 2025, the institution has integrated efforts by its main arms: the International Bank for Reconstruction and Development (IBRD), International Development Association (IDA), International Finance Corporation (IFC), and Multilateral Investment Guarantee Agency (MIGA). This structure facilitates coordinated support for public projects, private sector growth, risk mitigation, and mobilization of finance.

In April 2025, IFC announced agreements aimed at mobilizing sustainable finance, expanding non-oil sectors, and backing a major greenfield manufacturing project. One of the most notable achievements is Oman’s polysilicon plant—the largest in the region—which began operations in January 2026. Supported by IFC with a $250 million commitment, the $1.6 billion facility produces up to 100,000 tonnes of polysilicon annually, enough to supply 40 gigawatts of solar modules capable of powering 12 million homes each year. The plant is also expected to reduce greenhouse gas emissions by 8.8 million tonnes annually and create around 3,000 jobs.

Financing for the plant also included $713 million mobilized from development finance institutions, regional and international investors, and local banks, with the Oman Investment Authority’s Future Fund Oman investing $260 million, reflecting sovereign confidence in the project’s role in economic diversification and export growth. Earlier MIGA guarantees for infrastructure projects in the Special Economic Zone of Duqm have contributed to creating the conditions necessary for such large-scale investments.

Fiscal reforms have strengthened Oman’s economic position, with the country posting a budget surplus of 0.7% of GDP in 2025 and reducing public debt from nearly 69% of GDP in 2020 to 38.5% by 2025. The Sultanate projects a current account surplus of 3.4% for 2026, and central bank reserves stood at $19.3 billion at the end of 2025, sufficient to cover roughly four months of imports.

Although challenges remain, including regional geopolitical tensions and variability in tourism revenue, initiatives like the polysilicon plant illustrate Oman’s ability to attract global capital and integrate into future-oriented global supply chains. The World Bank Group continues to support Oman’s economic transition by facilitating investment, mitigating risks, and enhancing access to finance for small and medium-sized enterprises.