MUSCAT : Oman is forecast to be the only Gulf Cooperation Council economy to grow in 2026, with the World Bank projecting a 3.1% expansion as the country’s access to export routes outside the Strait of Hormuz helps it withstand the economic fallout from the regional war.

Higher oil production, government investment and resilient non-oil activity are expected to support growth, the bank said in its October outlook, although further escalation of the conflict could weaken the outlook.

The forecast places Oman in a comparatively strong position during a period of disruption to energy exports, shipping and business activity. The country’s deep-water ports outside Hormuz provide access to international markets, while its energy infrastructure has remained intact, helping sustain hydrocarbon and fertiliser exports.

The World Bank expects Oman’s oil sector to expand by more than 4% this year as OPEC+ production restrictions ease. Manufacturing and services are expected to underpin non-oil growth, alongside public investment.

However, the bank cautioned that Oman remains exposed to the consequences of a prolonged conflict. Tourism and logistics have already been affected, while persistent instability could undermine investor confidence, increase trade costs and slow economic diversification.

Oman’s fiscal position is expected to remain strong, provided the conflict does not intensify. The bank projected a budget surplus of 4.1% of gross domestic product in 2026, supported by higher oil revenue and measures to strengthen domestic revenue collection.

The longer-term challenge is to translate that resilience into broader private-sector growth and employment. The bank said continued gains in productivity, skills and innovation would be needed to advance diversification under Oman Vision 2040.

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