2018 Index of Economic Freedom


overall score61.0
world rank93
Rule of Law

Property Rights59.5

Government Integrity51.5

Judicial Effectiveness57.4

Government Size

Government Spending25.0

Tax Burden98.5

Fiscal Health17.7

Regulatory Efficiency

Business Freedom76.3

Labor Freedom55.2

Monetary Freedom79.2

Open Markets

Trade Freedom86.2

Investment Freedom65.0

Financial Freedom60.0

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Quick Facts
  • Population:
    • 4.0 million
  • GDP (PPP):
    • $184.8 billion
    • 4.1% growth
    • 4.7% 5-year compound annual growth
    • $46,698 per capita
  • Unemployment:
    • 17.5%
  • Inflation (CPI):
    • 1.1%
  • FDI Inflow:
    • $142.0 million
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Oman’s economic freedom score is 61.0, making its economy the 93rd freest in the 2018 Index. Its overall score has decreased by 1.1 points, with steep declines in the fiscal health and labor freedom indicators overwhelming higher scores for business freedom and judicial effectiveness. Oman is ranked 8th among 14 countries in the Middle East and North Africa region, and its overall score is slightly below the regional and world averages.

As Oman’s oil reserves dwindle, the government is using enhanced oil recovery techniques to boost production, but it also is focusing on fiscal reform and economic diversification to reduce the country’s heavy reliance on hydrocarbons. With businesses frequently complaining about bureaucracy and a cumbersome regulatory environment, the government plans to reduce red tape to attract investors. Other obstacles to economic freedom include a weak legal framework and subsidies and other forms of favoritism to state-owned enterprises.



A relatively small oil-producing kingdom that prospered from Indian Ocean trade, Oman is one of the least populous Arab countries. It has been ruled by Sultan Qaboos bin Said Al-Said since 1970. After the Arab Spring protests in 2011, the sultan changed cabinet ministers and promised reforms. A Consultative Council elected in 2011 expanded government regulatory and legislative powers. As part of its efforts to decentralize authority and allow greater citizen participation in local governance, Oman conducted its first municipal council elections in 2012. Oman joined the World Trade Organization in 2000 and is heavily dependent on its dwindling oil resources, which generate about four-fifths of government revenue. Tourism and gas-based industries are key components of the government’s diversification strategy.

Rule of LawView Methodology

Property Rights 59.5 Create a Graph using this measurement

Government Integrity 51.5 Create a Graph using this measurement

Judicial Effectiveness 57.4 Create a Graph using this measurement

Securitized interests in property, both moveable and real, are recognized, but the administrative enforcement regime is ineffective. The judiciary remains subordinate to the sultan and the Ministry of Justice. The law provides criminal penalties for official corruption, and implementation is generally effective, but many influential government officials have private business conflicts of interest.

Government SizeView Methodology

There is no individual income tax, and the top corporate tax rate is 12 percent. There are no consumption or value-added taxes. The overall tax burden equals 8.5 percent of total domestic income. Over the past three years, government spending has amounted to 50.0 percent of total output (GDP), and budget deficits have averaged 12.3 percent of GDP. Public debt is equivalent to 34.3 percent of GDP.

Regulatory EfficiencyView Methodology

In 2016, Oman made starting a business easier by reducing the minimum capital requirement and streamlining the registration of employees. Labor flexibility is held back by “Omanization,” which requires private-sector firms to meet quotas for hiring native Omani workers. Firing native Omanis is both lengthy and difficult. The government continues to reduce and better target fuel subsidies and is reviewing other subsidies such as electricity.

Open MarketsView Methodology

Trade is extremely important to Oman’s economy; the combined value of exports and imports equals 109 percent of GDP. The average applied tariff rate is 1.9 percent. Nontariff barriers impede some trade. Government openness to foreign investment is above average. The banking sector continues to evolve, and commercial banks are performing well. Most credit is offered at market rates, but the government uses subsidized loans to promote investment.

Country's Score Over Time

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Regional Ranking

rank country overall change
1United Arab Emirates77.60.7
9Saudi Arabia59.6-4.8

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