The Sultanate of Oman recorded an average inflation rate of 1.4% from 2021 until the end of 2024, maintaining a moderate level and staying within the 2.8% target set for the Tenth Five-Year Development Plan (2021-2025).
The Omani economy continued to grow at a rate exceeding inflation, with the average real GDP growth at constant prices reaching 3.9% from 2021 to 2023, while GDP growth stood at 1.9% from January to September 2024.
According to the Ministry of Economy, the global decline in inflation over the past year, driven by central banks raising interest rates, has helped reduce the pressure of imported inflation on local markets and industries.
This, in turn, has supported monetary easing policies and lower lending rates. Inflation has been one of the biggest risks to global economic growth in recent years, and Oman continues to closely monitor its levels across the governorates to ensure it remains within targets.
Precautionary policies and measures have played a crucial role in containing inflationary pressures, thereby safeguarding local purchasing power and economic stability.
For the 2025 fiscal year, Oman’s government has increased public spending to RO 11.8 billion from RO 11.65 billion in 2024.
The budget includes RO 577 million for the social protection system, RO 73 million for development and housing loan interest support, RO 520 million for the electricity sector, and RO 194 million for water and sanitation.
Additionally, RO 216 million has been allocated to subsidise petroleum products, food commodities, transportation and waste management.
As part of its monetary policy, Oman has maintained the Omani rial’s peg to the US dollar, aligning its interest rate policies with the US Federal Reserve. In 2024, the Central Bank of Oman reduced the repurchase rate for local banks to 5.00% following the global trend towards monetary easing.
Annual inflation data indicates a continued decline, with the consumer price index showing an average inflation rate of 0.60% from January to December 2024, compared to 0.94% in the same period in 2023.
The decline was driven by lower price increases in key sectors, such as food and non-alcoholic beverages, where inflation dropped to 2.8% from 3.2% in 2023. The transportation sector also recorded a price decline of 2.61% in 2024, following a 2.85% drop in 2023, while the housing, water, electricity, gas and fuel sectors saw only a minimal increase of 0.32%.
Inflation rates varied across Oman’s governorates in 2024. Musandam recorded the highest inflation at 1.32%, up from 0.76% in 2023, followed by Al Sharqiyah North at 1.29%, Al Wusta at 1.28% and Al Sharqiyah South at 1.20%. Dhofar saw inflation decline to 0.90% from 1.04% in 2023, while Muscat registered the lowest rate at 0.32%, down from 1.05%.
In terms of trade, import prices rose slightly by 1.1% in the third quarter of 2024 compared to the same period in 2023. This was mainly due to a 5.7% increase in food and live animal prices, a 6.7% rise in beverages and tobacco, and an 11% jump in miscellaneous manufactured goods.
However, mineral fuel prices saw a sharp decline of 22.2%. The producer price index also showed a 1.7% decrease by the end of the fourth quarter of 2024, with manufacturing industry prices falling by 3.8%, electricity prices dropping by 5.2%, and water prices declining by 4.4%.
Meanwhile, the mining and quarrying sector recorded a slight decline of 0.1%. These figures reflect ongoing adjustments in global and local markets as Oman navigates its economic strategy within the framework of the Tenth Five-Year Development Plan. — ONA
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