According to the latest World Bank estimates, Oman’s economy will grow by 3.1% in 2025, supported by ongoing economic diversification efforts and structural reforms. The bank also predicted steady economic growth across the Gulf region throughout the year, underpinned by policy reforms and rapid digital innovation.
As per the World Bank’s latest edition of the Gulf Economic Update (GEU) – Fall 2025, the UAE is expected to expand by 4.8%, followed by Saudi Arabia (3.8%), Bahrain (3.5%), Oman (3.1%), Qatar (2.8%) and Kuwait (2.7%) in 2025. As per the bank, sustaining this growth trajectory will require continued progress on “National Vision” strategies (economic diversification initiatives taken by the countries in the region) and disciplined fiscal management to mitigate risks arising from oil price fluctuations, geopolitical tensions and potential reform slowdowns.
On Oman’s economic outlook, the World Bank said, “Diversification is gaining pace, with non-hydrocarbon sectors increasingly driving growth. Real GDP is projected to expand by 3.1% in 2025, with further acceleration over the medium term.”
The report focuses on three critical areas, economic diversification, macroeconomic stability and digital transformation, while advising the Gulf countries to navigate global uncertainties and oil market volatilities. The study also reviewed a decade of diversification efforts across the region. These programmes, despite showing moderate progress over the past decade, are now showing more promising momentum.
“Hydrocarbons still dominate fiscal positions, making their role persistently central in shaping economic plans and development strategies. Non-oil exports remain modest, with chemicals dominating the non-oil export basket. The transition away from oil dependence remains a work in progress,” the World Bank said.
The report also highlights the Gulf’s rapid digital transformation, especially the accelerated adoption of artificial intelligence (AI).
“All countries now boast advanced telecom networks, with 5G coverage exceeding 90%, high-speed internet and affordable connectivity,” the World Bank noted, while adding that significant investments in data centres and high-performance computing systems are advancing AI readiness, with Saudi Arabia and the UAE emerging as regional and upcoming global leaders. Vibrant start-up ecosystems are supporting these two countries’ advancements, robust venture funding and the integration of generative AI applications across government services.
“Diversification and digital transformation are no longer optional; they are essential for long-term stability and prosperity. Strategic investments in non-oil sectors and innovation will be critical to sustaining growth and stability,” said Safaa el Tayeb el Kogali, World Bank Division Director for the GCC, while interacting with Muscat Daily.
“The GCC’s digital leap is remarkable. With robust infrastructure and growing computing power, skills and competencies in AI capabilities, the region is well placed to lead in innovation, provided labour and environmental challenges are addressed proactively,” she concluded.