Oman targets price stability amid global shocks

MUSCAT, SEPT 27
Inflation has taken on greater importance in the Sultanate of Oman in 2026 as price pressures rise from the previous year, alongside continued economic growth and government efforts to strengthen the country’s resilience to external shocks.
Dr Nasser bin Rashid al Maawali, Under-Secretary of the Ministry of Economy, said Oman’s average inflation rate stood at about 2.9 per cent in the first eight months of 2026, compared with a global average of 4.7 per cent projected by the International Monetary Fund.
Al Maawali said global inflation had become increasingly linked to movements in international markets as economies, supply chains and trade and investment flows became more interconnected. As a result, global developments were being transmitted to countries and economic sectors to varying degrees.
Geopolitical developments and regional supply-chain disruptions had also raised transport and logistics costs, as well as the prices of various goods and services, he said.
The pressures come against a backdrop of persistent global inflation. In July, the IMF raised its global inflation forecast for 2026 to 4.7 per cent, saying the decline in inflation had temporarily stalled because of economic and geopolitical developments.
Inflation in Oman is rising as the economy continues to expand. Real gross domestic product growth increased to an estimated 2.4 per cent in 2025 from 1.6 per cent in 2024, while the IMF forecasts growth of about 3.7 per cent in 2026 and 3 per cent in 2027.
Much of the projected growth in 2026 is linked to higher oil production. The IMF expects non-hydrocarbon activity to grow by about 2.5 per cent in 2026 and accelerate to 3.2 per cent in 2027 as the economic recovery broadens.
The figures point to two simultaneous trends: faster inflation and continued economic growth. Managing prices and protecting purchasing power are therefore part of the broader effort to sustain growth and investment.
Oman’s economic policy addresses inflation within a wider framework aimed at strengthening economic resilience and reducing exposure to external shocks.
The 11th Five-Year Development Plan for 2026-2030 aims to keep inflation below 2 per cent while achieving average real economic growth of about 4 per cent. It also seeks to advance economic diversification and fiscal sustainability.
Priority sectors include manufacturing, tourism, the digital economy, mining, food security, renewable energy, transport and logistics.
Al Maawali said the government continued to monitor price movements and assess policies and response mechanisms in light of global developments, supporting price stability and sustainable economic growth.
Inflation is being addressed through an integrated economic and social framework that brings together fiscal, monetary, production and trade policies. The approach also seeks to improve supply-chain efficiency, diversify import sources, support domestic production and strengthen the business environment.
Such measures are particularly important for an economy open to international trade, as fluctuations in food, energy and transport costs, as well as disruptions to global supply routes, can feed directly into domestic prices.
Increasing local production, broadening the supplier base and improving transport and logistics efficiency are therefore central to limiting the impact of external shocks.
Oman is entering the next phase of its development strategy with a focus on balancing price stability, continued economic growth and faster diversification.
Inflationary pressures are expected to remain under close scrutiny amid uncertainty in global markets. Oman’s efforts to expand domestic production, develop non-oil industries and strengthen supply-chain efficiency remain central to improving the economy’s resilience.