The ministry further said the deficit was 26% lower than the budgeted deficit of OMR 620 million (USD 1.61 billion), attributing the improvement primarily to higher oil and gas revenues.

Total revenues, on the energy front, amounted to OMR 8.481 billion (approximately USD 22 billion), including net oil revenues of OMR 6.640 billion (USD 17.26 billion). The average realized oil price stood at USD 72 per barrel, compared with the budget assumption of USD 60 per barrel.

“Average oil and condensate production reached 999,000 barrels per day, slightly below the budgeted level of 1.001 million barrels per day, reflecting Oman’s commitment to the voluntary production cuts agreed under the OPEC+ framework,” the Finance Ministry report stated.

Net gas revenues, on the other hand, totalled OMR 1.841 billion (USD 4.78 billion), supported by an increase in the average liquefied natural gas (LNG) selling price from the estimated USD 5.41 to USD 7.49 per unit.

“Non-oil revenues reached OMR 3.641 billion (USD 9.46 billion) by the end of 2025,” according to the report.

“Total public debt stood at OMR 14.6 billion (USD 36.41 billion) at the end of 2025, down by OMR 15 million (USD 39 million) from 2024, while all financing requirements were met and liability management operations were carried out without increasing the overall debt level,” it added further.

Talking about the Oman economy, the Gulf nation fared better compared to its regional peers in terms of showing resilience against the volatilities emerging from the US-Iran war, as the location of its major ports outside the Strait of Hormuz bottleneck, along with continued policy reforms, helped Muscat stay afloat.

As per the International Monetary Fund (IMF), favourable oil prices and continued commitment to fiscal discipline will generate sizable fiscal and external surpluses for the nation in the coming days.

An IMF team, led by Abdullah AlHassan (mission chief for Oman & Afghanistan), was in Muscat during June 7-15, 2026, to discuss economic and financial developments, the outlook, and the country’s policy priorities.

AlHassan told the Times of Oman, “Oman’s oil and natural gas infrastructure has remained largely unaffected, enabling Oman to increase oil production and exports amid regional supply disruptions. The banking sector remains well-capitalized and liquid, benefiting from strong buffers heading into the regional conflict and prudent oversight by the Central Bank of Oman (CBO).”

“The strong growth momentum continues. Real gross domestic product (GDP) growth accelerated in 2025 to 2.4% (from 1.6% in 2024), supported by both the hydrocarbon and non-hydrocarbon activities. Growth is projected at around 3.7% in 2026, driven by increased oil production, and 3% in 2027,” the senior official further added.

However, as per the IMF, a worrying point for Muscat will be the non-hydrocarbon sector, whose growth is expected to ease to 2.5% in 2026, reflecting the impact of the Iran war on tourism and construction.

However, the global monetary body sees the blip as a temporary one, as the growth in 2027 will again accelerate to 3.2% on the back of a broad-based recovery. Average inflation remained contained at 1% in 2025 before rising to 2.8% (year-on-year) during January-May 2026, driven by higher food and transportation prices.

In his final remarks, Al Hassan said, “Oman’s fiscal and external positions are set to strengthen, supported by higher oil revenues and continued fiscal discipline. After narrowing to 0.6% of GDP in 2025, reflecting lower oil prices and increased capital spending, the fiscal surplus is projected to widen to 4.5% of GDP in 2026 and 4.2% in 2027. Central government debt continues its downward trajectory, reaching 34.7% of GDP at 2025 end.”

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Effective January 1, 2025, the amendment is expected to benefit a wide range of businesses in the real estate and capital-intensive sectors, enhancing compliance, planning flexibility, and investor confidence, according to tax experts.

Dhruva, a leading tax advisory firm in the Middle East, welcomed the UAE government’s move, as it addresses a long-standing issue for taxpayers using the fair value model, who have been unable to claim depreciation deductions for their investment properties.

“This decision is a welcome step towards aligning accounting and tax principles in the UAE. It offers businesses more options and creates consistency in the treatment of investment properties for tax purposes. Importantly, it provides companies with a one-time opportunity to elect the realisation basis of taxation — a choice that is irrevocable and requires careful evaluation,” said Sandeep Kumar, Corporate Tax Partner at Dhruva.

Following the implementation of the new amendment, a taxable person can claim depreciation at an annual rate of 4% on the investment property’s original cost. However, to take advantage of this, the entity must elect the realisation basis of taxation, a permanent decision that must be made within a specified time frame. Additionally, once the election is made, it is final and must be made at the taxable person level. Businesses that fail to elect within the allotted time will permanently lose the ability to claim depreciation on investment properties held at fair value.

The Ministry of Finance has also outlined specific provisions for properties transferred under Business Restructuring Relief (BRR), Qualifying Group Relief (QGR), or within Tax Groups (TG), to ensure consistency and clarity in such arrangements. Furthermore, since depreciation under the fair value model does not appear in financial accounts, claiming it for tax purposes may create a temporary difference, leading to a deferred tax liability under international accounting standards.

Importantly, according to Dhruva, the decision also clarifies the tax implications upon the realisation of such properties, including adjustments for previously claimed depreciation. Special provisions have been established for intra-group transfers, business restructurings, and tax groups when realising such properties.

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July 29, 2013: Croatia became an integral part of the European transport market when it joined the European Union (EU) on 1 July, 2013, opening up both opportunities and challenges for its railway sector. The Government had worked hard to prepare the legal and institutional framework of the railway sector to comply with the requirements of the EU’s Acquis Communautaire (the cumulative body of European Community laws), which in turn contributed to strengthening the role of regulatory institutions and improving the sector’s operating environment.

Croatia’s railway sector was the subject of significant analysis undertaken by the World Bank between December 2011 and September 2012. The results of this work werepresented in a Policy Note to the Government on 19 July, 2013 in Zagreb, with specific advice for the Ministry of Maritime Affairs, Transport and Infrastructure (MMATI) and Ministry of Finance (MOF) about how the railway sector can become a greater engine of growth and its railway companies more efficient and competitive. Prior to this, an ongoing dialogue between the World Bank and the Government in 2012 had produced earlier versions of this Policy Note which informed the Government’s restructuring plan for the railway sector that led, inter alia, to the dismantlement of the public railway holding company and the autonomy of public infrastructure, passenger services and cargo services companies.

What is the current state of Croatia’s railway network?

From the mid 1990’s to 2010, Croatia invested heavily in the development of a national motorway network, which is now almost complete. By comparison, the railway network has only marginally improved over the past decade, despite investment in modernizing certain bottlenecks in the country’s international corridors and the increased competitiveness of its sea ports. With 2,723 km of tracks, Croatia’s rail network is close to the European average in terms of network density, and has the potential to increase transit along key European transport corridors, particularly for international cargo to Central European markets.

Despite the progress that has been achieved with regard to its regulatory institutions, however, Croatia’s railways still lag behind those of other European Union countries in terms of performance, infrastructure, and safety. In addition, traffic intensity remains stubbornly low. The global economic crisis that began in 2008 impacted negatively on the financial position of the State-owned railway undertakings, and the rail network still requires substantial State subsidies (0.7 percent of GDP in 2011), most of which are for operations.

Croatia continues to experience high unemployment, a growing trade deficit, uneven regional development, and a difficult investment climate, which puts additional pressure on the Croatian railway system to improve its financial sustainability and to reduce its dependence on public funds.

Nevertheless, Croatia’s accession to the EU provides unique opportunities for the country to modernize its key international corridors through the use of EU Structural Funds, and to open up the railway sector to increased investment, market competitiveness, and efficiency.

What are the main challenges facing Croatia’s railway sector?

There are three fundamental challenges facing Croatia’s railway sector. The first challenge is to ensure that the Government receives value for the money it provides to the railway companies. The survival of the railways system so far has largely been due to significant financial support from the State, with relatively little effort given to rationalizing its assets or human resources. In the context of EU accession, this bias for operations over investments raises questions about the sustainability of the current model.

The EU accession requirements ensured that the Government implemented a new legal and institutional framework for the railway sector, but this does not guarantee that the railways will develop as a viable transport industry. A major challenge for the Croatian authorities over the coming years is to create a rail industry that is competitive and that can adapt quickly to changing market conditions, while refraining from intervening directly in the management of the sector.

The third challenge is to ensure that the key operators in Croatia’s railway industry attain financial sustainability, with minimum reliance on Government subsidies to cover operating costs. Failure to meet this challenge would limit the Government’s capacity to allocate much-needed funds to productive investment and to the country’s overall economic development.

How can Croatia address these challenges effectively?

The Policy Note makes proposals for how Croatia’s railway sector can meet challenges in four key areas: Sector Governance, Corporate Governance, Business Culture, and Sector Financing Strategy.

Sector Governance

Government action is vital for the effective formulation and implementation of public policies in the railway sector, and should be based on clear and consistent ownership, and transparent, accountable and professional relationships between the state and railway operators. Railway related activities should be coordinated among the relevant Ministries and among government, railway agencies and railway operators.

The Government is advised to undertake a range of steps, including to: develop a long-term strategy for railway network development; put in place a sound system for absorbing EU funds; encourage competition in rail freight; enhance its institutional capacity; and develop a sustainable railway network. In addition, the Government is encouraged to improve the contractual relationships required by the EU to rule subsidized operations (infrastructure maintenance and passenger services) by increasing performance incentives and the accountability of the infrastructure manager and the rail passenger operator. The Government is also expected to finalize the privatization of rail cargo operations

Corporate Governance

The corporate management and performance of rail service providers needs to improve, and should be monitored closely, in order to ensure their long-term sustainability. The Government is advised to: restructure companies, ensuring that CEOs are selected by a merit-based process; develop a business plan and enhance infrastructure business planning; improve the efficiency of infrastructure management; and improve the efficiency of cargo and passenger operations.

Business Culture

Croatia’s railway sector not only needs a new vision, but a new business model – one that is based on the country being an important transit and logistics hub in South East Europe. Without a collective effort, however, on the part of both public and private stakeholders and a change in the business culture, this model will be difficult to sustain.

Croatia is now an important part of the European transport market, and its railway companies will need to be versatile and adapt to market changes in order to become more efficient and competitive over the long-term, while the Government will need to ensure that the other actors in the logistic chain (Port and border agencies) also contribute to this objective.

Sector Financing Strategy

In its highly constrained financial situation today, Croatia’s Government needs to be selective in its use of public funds. The Policy Note advocates: 1) rationalizing and, if possible, diminishing operating subsidies through more incentives for productivity and a review of the value for money of passenger services; 2) focusing public resources on the co-financing of EU funded investment in the main transport corridors and in critical investment, and 3) providing medium-term visibility to the operators about future investments over the coming years.

Source:World Bank

– See more at: http://www.internationalfinancemagazine.com/article/Croatias-Railway-Sector-On-Route-to-Efficiency-and-Competitiveness.html#sthash.yKwJH6eD.dpuf

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