While the Central Bank of Oman (CBO) has reiterated that inflation in the Sultanate of Oman is expected to remain moderate despite rising inflationary trends worldwide, the Ministry of Economy has called for changes in consumer behaviour.
The ministry, in a report, recently analysed consumption patterns and said that average citizens should review spending decisions to achieve financial stability.
The ministry added that the first step to achieve financial stability is to prepare a budget because spending randomly in the absence of a plan often leads to increased consumption and the inability to control it.
According to experts, inflation rates have reached unprecedented levels in developed economies, which is the highest since 1982, and according to IMF, for many people 2023 will feel like a recession.
To mitigate the repercussions of inflation's high prices on lives, awareness should be created to improve consumption patterns, such as focusing on actual needs and reducing spending on unnecessary luxuries, the ministry said.
“Consumer behaviour is often determined by the economic situation, per capita income, and availability of consumer products. It is also affected by the individual’s inability to make better decisions, which results in the consumption of unnecessary products or choosing products that are above one’s purchasing capacity. The products marketed on social networks also motivate consumers to choose specific products over others.”
The report called for an emphasis on having a budget or a plan to control spending, especially random ones.
Consumers should be able to save a specific amount from their income, such as five per cent of the total income or RO 50 a month.
As saving funds reaches a good amount, individuals can reward themselves by having a dinner in a restaurant, or buy a luxury product.
“Saving certain amount from the monthly income is important as a protection for the family from any economic or financial problems or challenges that the family may face any time, whether because of an economic crisis or other special crises.”
Badr al Aufi, an Omani economic analyst, said that setting monthly plans to manage and regulate consumption must be in all economic conditions and not be limited to periods of inflation only, as the individual or family must set a basic rule, which is to determine the amount of monthly savings steadily and not be less. This percentage is less than 10 per cent of the total income, at least.
Meanwhile, the CBO report added, “As an oil exporter, rising commodity prices are a net positive for Oman as the higher proceeds from hydrocarbons haرث provided ample fiscal space to the government to counterbalance any inflationary pressures with targeted interventions to complement the impact of monetary policy.”