Oman maintains inflation rate within the target limits
Published: 03:06 PM,Jun 29,2024 | EDITED : 07:06 PM,Jun 29,2024
Inflation rate in Oman remained below one per cent in 2023, rising by just 0.12 per cent from January to April compared to the same period in the previous year.
MUSCAT: The Sultanate of Oman has successfully maintained its inflation rate within the target limits outlined in the Tenth Five-Year Plan, aligned with its economic and financial objectives.
According to the consumer price index, the inflation rate in Oman remained below one per cent in 2023, rising by just 0.12 per cent from January to April compared to the same period in the previous year.
The Ministry of Economy attributes this stability to several governmental measures, including the stabilisation of fuel prices based on October 2021 rates and support for basic foodstuffs. Additionally, a global decline in prices, particularly for food commodities, played a significant role. The Food and Agriculture Organization reported a 7.4 per cent drop in its food price index in April 2024 compared to April 2023.
Examining the components of the Consumer Price Index, the food and beverages group, which constitutes 20.615 per cent of the index, saw a 2.13 per cent price increase between January and April this year. Conversely, the clothing and footwear group decreased by 0.05 per cent, the Restaurants and Hotels group by 0.04 per cent, and the Furniture and Home Appliances group by 0.14 per cent. The transportation group experienced a notable decline of 3.4 per cent. Other groups saw marginal increases, such as the housing, water, electricity, gas, and other fuels group, which rose by 0.01 per cent, making up 31.7 per cent of the index.
Inflation rates varied across different regions. The highest rate of increase was in North Al Sharqiyah Governorate at one per cent, followed by Al Wusta Governorate at 0.71 per cent, Dhofar at 0.63 per cent, Musandam at 0.52 per cent, South Al Sharqiyah at 0.47 per cent, North Al Batinah at 0.45 per cent, Al Dhahirah at 0.43 per cent, Al Buraimi at 0.39 per cent, and South Al Batinah at 0.29 per cent. Meanwhile, inflation decreased in Muscat and Al Dakhiliyah by 0.25 per cent and 0.10 per cent, respectively.
The Ministry underscored the role of the Governorate Development ProgramME, implemented under the Tenth Five-Year Plan to support decentralisation and balanced growth. A key initiative is the Governorate Competitiveness Index, which tracks development efforts and guides investment priorities based on each governorate's needs. This index integrates the governorate inflation rate index to monitor price changes and purchasing power, aiding in maintaining market balance and addressing supply chain issues.
The Ministry also monitors the Import Price Index and the Producer Price Index due to their impact on local prices and production costs. Imported inflation, influenced by global price rises, affects local market prices and production costs for Omani producers, manufacturers, and traders.
Oman's strategic goals under the Tenth Five-Year Plan include reducing these impacts by decreasing imports and boosting local production through food security projects, localising industries, and promoting Omani products in both local and international markets. Enhancing global trade partnerships, establishing direct import lines, and diversifying import markets are also key strategies.
Recent data from the National Center for Statistics and Information reveal a 1.7 per cent decrease in the producer price index during the first quarter of this year compared to the same quarter last year, and stability in the import price index during the fourth quarter of 2023 compared to the same period in 2022. This stability resulted from price declines in manufactured goods, chemicals, mineral fuels, and live animals, despite increases in machinery and various manufactures.
Globally, central banks' efforts to contain inflation by raising interest rates led to a decline in inflation from its peak levels in 2021 and 2022, though it remains higher than pre-pandemic levels. The US Federal Reserve recently maintained interest rates, citing persistent inflation.
The World Bank's latest 'Prospects for Commodity Markets' bulletin indicates that global commodity prices are stabilising after significant declines in the past year, which helped reduce general inflation. However, the World Bank projects a continued decline in commodity prices by three per cent in 2024 and four per cent in 2025, but these reductions are unlikely to significantly curb inflation, which still exceeds target levels. — ONA
According to the consumer price index, the inflation rate in Oman remained below one per cent in 2023, rising by just 0.12 per cent from January to April compared to the same period in the previous year.
The Ministry of Economy attributes this stability to several governmental measures, including the stabilisation of fuel prices based on October 2021 rates and support for basic foodstuffs. Additionally, a global decline in prices, particularly for food commodities, played a significant role. The Food and Agriculture Organization reported a 7.4 per cent drop in its food price index in April 2024 compared to April 2023.
Examining the components of the Consumer Price Index, the food and beverages group, which constitutes 20.615 per cent of the index, saw a 2.13 per cent price increase between January and April this year. Conversely, the clothing and footwear group decreased by 0.05 per cent, the Restaurants and Hotels group by 0.04 per cent, and the Furniture and Home Appliances group by 0.14 per cent. The transportation group experienced a notable decline of 3.4 per cent. Other groups saw marginal increases, such as the housing, water, electricity, gas, and other fuels group, which rose by 0.01 per cent, making up 31.7 per cent of the index.
Inflation rates varied across different regions. The highest rate of increase was in North Al Sharqiyah Governorate at one per cent, followed by Al Wusta Governorate at 0.71 per cent, Dhofar at 0.63 per cent, Musandam at 0.52 per cent, South Al Sharqiyah at 0.47 per cent, North Al Batinah at 0.45 per cent, Al Dhahirah at 0.43 per cent, Al Buraimi at 0.39 per cent, and South Al Batinah at 0.29 per cent. Meanwhile, inflation decreased in Muscat and Al Dakhiliyah by 0.25 per cent and 0.10 per cent, respectively.
The Ministry underscored the role of the Governorate Development ProgramME, implemented under the Tenth Five-Year Plan to support decentralisation and balanced growth. A key initiative is the Governorate Competitiveness Index, which tracks development efforts and guides investment priorities based on each governorate's needs. This index integrates the governorate inflation rate index to monitor price changes and purchasing power, aiding in maintaining market balance and addressing supply chain issues.
The Ministry also monitors the Import Price Index and the Producer Price Index due to their impact on local prices and production costs. Imported inflation, influenced by global price rises, affects local market prices and production costs for Omani producers, manufacturers, and traders.
Oman's strategic goals under the Tenth Five-Year Plan include reducing these impacts by decreasing imports and boosting local production through food security projects, localising industries, and promoting Omani products in both local and international markets. Enhancing global trade partnerships, establishing direct import lines, and diversifying import markets are also key strategies.
Recent data from the National Center for Statistics and Information reveal a 1.7 per cent decrease in the producer price index during the first quarter of this year compared to the same quarter last year, and stability in the import price index during the fourth quarter of 2023 compared to the same period in 2022. This stability resulted from price declines in manufactured goods, chemicals, mineral fuels, and live animals, despite increases in machinery and various manufactures.
Globally, central banks' efforts to contain inflation by raising interest rates led to a decline in inflation from its peak levels in 2021 and 2022, though it remains higher than pre-pandemic levels. The US Federal Reserve recently maintained interest rates, citing persistent inflation.
The World Bank's latest 'Prospects for Commodity Markets' bulletin indicates that global commodity prices are stabilising after significant declines in the past year, which helped reduce general inflation. However, the World Bank projects a continued decline in commodity prices by three per cent in 2024 and four per cent in 2025, but these reductions are unlikely to significantly curb inflation, which still exceeds target levels. — ONA