Oman’s economy has thus far shown resilience amid the war in the Middle East, supported by the location of its major ports outside the Strait of Hormuz bottleneck and continued prudent policies. However, the geopolitical situation remains fluid, with elevated uncertainty and downside risks. Favorable oil prices and continued commitment to fiscal discipline are expected to generate sizable fiscal and external surpluses, and support higher nonhydrocarbon growth, over the medium term. Sustaining progress in implementing fiscal and structural reforms will be essential to reinforce fiscal and external sustainability. [...]