Oil carried Oman’s GDP growth in 1H, but construction, hospitality, and transport all shrank in real terms

Oman’s economy grew 3.8% y-o-y in real terms in 1H 2026 to OMR 19.5 bn (USD 51 bn) — but almost all of the growth was oil. Oil’s share of GDP climbed to 35% in 2Q, up from 32% a year earlier, while the non-oil economy’s share slipped from 43% to 41%, according to the National Center for Statistical Information’s latest monthly bulletin. Oil output rose 9.7% in 1H, while the non-oil economy expanded at just 1.3%. Higher crude prices did the heavy lifting — Oman’s export price averaged USD 83.3/bbl for the year through August, up 15.5% y-o-y.

The breakdown shows where the pain is concentrated: Construction’s share of GDP slipped from 8% to 7% as the sector contracted 3.2%, while hospitality and food contracted 3.3% on the back of reduced hotel revenues (11%) as westerners halted travel to the country. The surprising data point, however, was transport and storage, which shrank by 1.9% — despite Oman being a critical node in keeping trade flows to and from the rest of the GCC during Hormuz disruptions.

The one standout was financial and ins. services, which grew 9.5% — the fastest of any non-oil sector, and now 6% of GDP.

FDI was also another casualty, and it shows the same oil dependency: Net inflows fell 44% y-o-y to OMR 1.9 bn (USD 4.94 bn) in 1H, and 72% went to oil and gas. The UK stayed the dominant source at OMR 1 bn (USD 2.6 bn).

Domestic capital, meanwhile, is chasing paper and property: The MSX30 was up 51% y-o-y through August, and residential real estate prices climbed 25% in 2Q.

Still, Oman seems to be investing its way through the crisis: Spending rose 6%, with investment accounting for the fastest-growing component at 16%. That was the main driver behind the OMR 17 mn (USD 44.2 mn) budget deficit during 1H, despite revenues going up 13% to OMR 6.6 bn (17.2 bn) on the oil price windfall.