Muscat – Oman’s government plans to issue government development bonds and sovereign local sukuk worth RO850mn in 2026. The planned local market issuances form part of the government’s strategy to meet its financing requirements, covering both a projected budget deficit and public debt servicing this year.
Total domestic borrowing in 2026 is estimated at RO902mn, including government development bonds and sovereign local sukuk.
The government will raise RO850mn from the local market through four issues of government development bonds worth RO150mn each and two issuances of sovereign local sukuk worth RO125mn each, according to details outlined in the Ministry of Finance’s 2026 budget guidance.
The Ministry of Finance has developed the government’s borrowing plan for 2026 based on estimates set out in the State’s General Budget for 2025. This includes projections for public debt, financing needs and the financing plan for the year ahead.
Total financing needs for 2026 are projected at RO2.292bn, comprising a budget deficit of RO530mn and RO1.762bn required for public debt servicing. The government intends to meet these requirements through a combination of local borrowing (RO902mn), external borrowing (RO990mn) and a withdrawal from reserves (RO400mn).
However, the Ministry of Finance noted that the borrowing plan may change depending on actual financing needs and prevailing market conditions.
The ministry also said the 2026 borrowing plan is designed to meet the government’s financing needs at a reasonable cost and within an acceptable level of risk. It aims to improve the efficiency of the domestic debt market by expanding the market for government securities. The plan also seeks to mitigate risks associated with the public debt portfolio through proactive debt management to reduce financing costs, as well as to diversify funding sources by broadening the investor base.
The ministry’s budget statement added that the government will continue to enhance its management of financial obligations by examining and implementing opportunities for early repayment and refinancing of existing loans and financial instruments with lower-cost loans and longer maturities. This approach is intended to improve the debt structure and strengthen its sustainability over the medium and long term.
In 2025, the sultanate planned to raise RO750mn through local borrowing and RO1.304bn via external debt.
The Ministry of Finance last year achieved significant results in public debt management, supported by disciplined borrowing policies and effective liability management. All financing needs for 2025 were met, and liability management exercises were carried out without increasing total debt, the ministry said.
As a result of its medium-term fiscal plan, the Omani government has reduced total public debt from RO19.8bn at the end of 2020 to RO14.6bn by the end of 2025, according to preliminary results from the 2025 budget. The sultanate’s public debt-to-GDP ratio has declined from 67.9% in 2020 to 35.7% by the end of 2025.
