His Majesty Sultan Haitham bin Tarik issued a Royal Decree (“RD”) on 1 January 2025, published in the Official Gazette on 5th January 2025, promulgating the 2025 State Budget (RD 1/2025). In this News Alert, we are setting out the key features of the 2025 State Budget.
Snapshot of the key features
Oman budget 2025
| Projected Revenue | OMR 11.18 billion |
| Projected Expenditure | OMR 11.8 billion |
| Projected Deficit | OMR 0.62 billion |
| Projected income from the Oman Investment Authority (“OIA”) | OMR 0.8 billion |
| Projected investment by OIA | OMR 1.8 billion |
| Projected Income from Taxes and Fees Revenue | OMR 2.027 billion |
| Projected average oil price | $60 |
Oman is projecting a fiscal deficit of OMR 0.62 billion in 2025, down by 3% on year-on-year budgeting, as growth in state spending is outpaced by a stronger growth in revenues on the back of projected higher gas receipts. This is despite a 1.4 percent decrease in oil revenue compared to last year budgeted revenue. However, the marginal change in budgeted deficit suggests that the Government remains conservative in its approach to growth and spending in the upcoming years.
Revenues and expenditures were estimated in line with Oman Vision 2040 and 10th Five-Year Development Plan (2021-2025). The budget was prepared with an aim to maintain financial, economic and social stability taking into account various factors such as the uncertainty facing global oil markets, global inflation, elevated global debt, tightening monetary monetary policies, and evolving geopolitical tensions.
Also important considerations in determining the budget, was a set of economic and social objectives such as further improving Oman’s credit rating, providing employment opportunities, economic growth of not less than 3% during 2025 and last but not the least economic diversification.
Oil and gas revenues are forecasted at around OMR 7.6 billion, or 68% of overall receipts, increase from 7.49 billion from budgeted 2024 and down from 9.15 billion from the actual result of 2024,. Oman's projected revenue figures are based on an assumed oil price of $60 per barrel which is consistent from an expectation of $60 per barrel in the 2024 budget. Again, the projected average oil price seems to be on a conservative basis considering that the current oil prices are relatively higher and the actual average oil price per barrel for Oman Crude of $82 per barrel in 2024.
The reduction of 1.4% in oil revenue as per the budget 2025 is due to decrease in expected production of oil by 2.9 percent compared to the 2024 estimates, while the 2025 budget assumes the same average oil price of $ 60 per barrel.
Learn more about the key features, economic developments, and main takeaways below.
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Gaurav Kapoor
Partner - Tax Reporting & Strategy Leader for Oman, PwC Middle East
Tel: +968 93891546
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