MUSCAT, MAY 29
A report by the International Monetary Fund (IMF) has warned that spiralling international inflation is a principal factor behind rising commodity prices in the Middle East & North Africa (MENA) region.
“Food prices accounted for about 60 per cent of last year’s increase in headline inflation in the Middle East and North Africa, excluding the countries of the Gulf Cooperation Council. Hence, we project inflation to remain elevated in the region in 2022 at 13.9 per cent — a significant upward revision relative to our previous projections in October’’, the world body noted in a recent IMF Blog titled ‘Middle East and North Africa’s Commodity Importers Hit by Higher Prices’.
In the Sultanate of Oman, inflation rose by 2.7 per cent in April 2022 compared to April 2021, according to the latest data from the National Centre for Statistics and Information (NCSI).
In March 2022, the inflation rate also went up by 0.6 per cent compared to March 2021.
The NCSI data indicates an uptick in the prices of the main representative indicators during April 2022 compared to the same month in 2021, such as food and non-alcoholic beverages (5.4 per cent), education (5.1 per cent), health (2.8 per cent), transport (2.4 per cent), miscellaneous goods and services (2.2 per cent), housing, water, electricity, gas and other fuels group (2 per cent), recreation and culture (1.4 per cent), restaurants and hotels (1.2 per cent), clothing and footwear (1.1 per cent) and furniture, household equipment and routine household maintenance (0.3 per cent).
However, the tobacco group declined by 1.1 per cent The increases were steeper for oils and fats (14.9 per cent), vegetables (9.8 per cent), fruits (8 per cent), meats (7.7 per cent), fish and seafood (6.5 per cent), bread and cereals (2.7 per cent), sugar, jam, honey and sweets (1.8 per cent), milk, cheese and eggs (1.3 per cent) and other foodstuff (0.9 per cent).
However, the prices of non-alcoholic beverages went down by 0.2 per cent.
Significantly, the IMF blog urges policymakers in the MENA region to be aware of all the risks and the impact of high international prices on the people.
“It is urgent that countries address food security risks and mitigate the impact of high international prices on the poor. The most effective way is to ensure vulnerable households are protected with targeted, temporary and transparent transfers.
Where safety nets are less strong, prices could be raised gradually. For low-income countries, sustained financial support from the international community is crucial’’, the authors said in the report.
“For countries with high debt, these measures should be accompanied by offsetting measures elsewhere — for example, cutting unnecessary spending, promoting additional tax equity, or a combination of the two — to safeguard debt sustainability given limited fiscal space, also coordinating fiscal and monetary policies and anchoring them in credible medium-term policy frameworks will help ease these trade-offs’’, they further added.
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