The government of Oman intends to issue government development bonds and sovereign local sukuk totaling RO850 million in 2026. The intended local market issuances are part of the government plan to fulfill its financing needs, not only a purported budget shortfall, but also servicing its debt this year.
The total domestic borrowing is estimated at RO902 million in 2026, comprising government development bonds and sovereign local sukuk.
According to details outlined in the Ministry of Finance’s 2026 budget guidance, the local market will provide the government with RO850mn via four issues of government development bonds of RO150 million each and two issues of sovereign local sukuk of RO125 million each.
The government has formulated a borrowing strategy that will be enforced by the Ministry of Finance in 2026 on the basis of the predictions provided in the general budget of the State in 2025.
Therefore, this includes in terms of projections on the public debt, financing requirements, and the financing plan in the upcoming year. The total financing requirements in 2026 are estimated to be RO2.292 billion, which includes RO530 million budget deficit and RO1.762 billion public debt servicing requirements.
However, the government plans to satisfy such needs by a mix of local borrowing (RO902 million), external borrowing (RO990 million), and withdrawal of reserves (RO400 million). The Ministry of Finance remarked that the borrowing plan can vary as per the actual financing requirements and the current market conditions.
The ministry also stated that the 2026 borrowing plan would provide the government with the financing requirement at a fair cost and with an acceptable level of risk-taking. It seeks to enhance the effectiveness of the domestic debt market by increasing the market for government securities.
The strategy is also aimed at reducing risks linked with the public debt portfolio by proactively managing the debt to enhance the cost of financing sources, and also diversifying funding sources by expanding the list of investors.
The ministry’s budget statement indicated that the government will keep improving its management of financial obligations, through checking and executing possibilities of early repayment and refinancing of current loans and financial instruments using less costly loans and longer maturities.
This strategy is aimed at enhancing the debt structure and increasing its sustainability in the long and medium run. The sultanate planned to increase RO750 million through local borrowing and RO1.304 billion from external debt in 2025.
The Ministry of Finance has recorded great outcomes in public debt management last year due to disciplined policy in borrowing and management of liabilities. The ministry claimed that all financing requirements were satisfied in the year 2025, and the management of the liabilities had been conducted without an increase in the aggregate debt.
As per the preliminary results from the 2025 budget, as an outcome of its medium-term fiscal plan, the Omani government has reduced total public debt from RO19.8 billion at the end of 2020 to RO14.6 billion by the end of 2025.
The ratio of the public debt to GDP of the sultanate has decreased by 67.9 percent in 2020 to 35.7 percent at the end of the year 2025.
