Oman’s non-oil strategy pays off as quarterly GDP rises to $27bn

4.7% year-on-year growth in Q1

Sharp increase in services sector

Non-oil industrial rising quickly

Oman’s gross domestic product rose 4.7 percent to $27 billion in the first quarter of this year compared to the same period in 2024, according to national statistics. 

The spike in GDP was buoyed by a sharp increase in the services sector, which grew by 4.2 percent in the first quarter to $12.5 billion, said the National Centre for Statistical Information.

The biggest rise in the services sector was in wholesale and retail trade, which hit $2.2 billion in Q1 this year, up 3.3 percent from Q1 2024.

However, Oman’s GDP in oil production fell by 7.5 percent to $7.1 billion over the two periods, according to the statistics agency. It did not suggest a reason for the decline. 

Oman, an Opec+ member, is producing about 1 million barrels of crude oil per day. However it expects its oil reserves, currently at about 5 billion barrels, to be severely depleted by 2060. 

Oman’s GDP since 2021

Addressing Oman’s parliament on Wednesday, Qais Al Yousef, minister of commerce, industry and investment promotion, said that in the full year 2024 the non-oil industrial sector surged by 8.6 percent to peak at around OR3.6 billion ($9.4 billion), accounting for 10 percent of GDP. 

The non-oil industrial sector recorded average annual growth of about 7 percent through Oman’s development blueprint for 2021-25, Al Yousef added.

Industrial exports also rose to one of their highest levels last year, hitting about OR6.2 billion. The sector attracted around OR2.5 billion in foreign direct investment (FDI).

“Growth in the industrial sector was the highest among diversification sectors … it was achieved as a result of facilities and incentives introduced in this sector… we aim for 7 percent growth annually during the 2040 industrial strategy to lift the sector’s contribution to GDP to OR11.6 billion,” Al Yousef said.

Cumulative FDI flow into Oman’s industrial projects and other sectors totalled about OR30 billion at the end of 2024, he pointed out.

Oman’s economy ministry has reported “significant” progress in implementing the 2021-25 development plan, thanks to a sharp rise in project funding to around OR11 billion, 72 percent higher than the projected investment.

“This growth follows the completion and launch of numerous infrastructure and economic diversification initiatives across various service and social sectors,” the ministry said this week.

Despite the diversification schemes, Oman’s oil sector remains the dominant component of GDP. In 2024, it stood at around $31 billion, just under a third of GDP of about $99 billion, according to the ministry.

In the first quarter of 2025, oil and gas revenues totalled around $5 billion, nearly 74 percent of the total revenues of about $6.7 billion.