Muscat – The World Bank has projected that Oman’s economy will grow by 3.1% in 2025, supported by ongoing economic diversification efforts and structural reforms.

The bank said economic growth across the GCC is gaining momentum in 2025, underpinned by structural reforms and rapid digital innovation.

According to the World Bank’s latest edition of the Gulf Economic Update (GEU) – Fall 2025, the UAE is expected to expand by 4.8%, Saudi Arabia by 3.8%, Bahrain by 3.5%, Oman by 3.1%, Qatar by 2.8% and Kuwait by 2.7% in 2025.

The bank noted that sustaining this growth trajectory will require continued progress on national Vision strategies 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 navigating global uncertainty and oil market volatility. It reviews a decade of diversification efforts across the GCC, showing moderate progress over the past decade, although recent trends appear more promising.

‘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 and accelerating adoption of artificial intelligence (AI). All GCC countries now boast advanced telecom networks, with 5G coverage exceeding 90%, high-speed internet and affordable connectivity, the bank noted.

It added 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 even global – leaders. Their progress is supported by vibrant start-up ecosystems, strong 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.

“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.”