Oman’s inflation rate at acceptable levels due to strong fundamentals

The inflation rate in the Sultanate of Oman remained at acceptable limits of about 3.1 per cent during the period January-August, which is much lower than the rate recorded by some economies, including advanced economies, the Ministry of Economy (MoE) revealed on Saturday.

According to Nasser bin Rashid al Maawali, Under-Secretary for Economy, “The inflation rate has been maintained at reasonable levels due to the strong fundamentals of our economic policy as it enabled Oman to tackle the supply chain crisis related to foodstuffs.”

Some of the measures taken by the government include having a ceiling on monthly fuel prices.

The five-year development plan seeks to maintain the average inflation rate of 2.8 per cent throughout its year.

As per the statistics, the inflation rate witnessed a remarkable decline to 2.4 per cent in August 2022 compared to 4.4 per cent in January 2022 even though global interruptions in supply chains due to the pandemic and international crisis drove inflation to unprecedented levels in many economies of the world.

In April 2022, the global inflation rate at 7.8 per cent was the highest since the 2008 financial crisis and it rose to 6.9 per cent in advanced economies, the highest level since 1983.

The International Monetary Fund had predicted that inflation in 2022 to be 9.4 per cent in emerging and developing economies, the highest level since 1995.

However, according to analysts, GCC countries experienced rising consumer prices to a lesser degree because governments give top priority to restricting the prices of essential commodities. “The government of the Sultanate of Oman encouraged direct supply of food items during the crisis, which helped to maintain the inflation rate at acceptable levels.”

Speaking to the Observer, several consumers said the prices of vegetables and fruits have gone up, but not doubled like in many other countries.

According to the data by the National Centre for Statistics and Information (NCSI), prices of food and non-alcoholic beverages went up by 4.9 per cent in August, transport by 3.1 per cent and restaurants and hotels by 2.1 per cent and fruits by 7.5 per cent, and other foodstuff by 1.9 per cent.

@vinot_nair