Oman’s Inflation Eases for 2nd Straight Month

Oman’s annual inflation rate eased for the second straight month in March, mainly due to a sharp drop in the prices of fish and seafood products. Inflation – as measured by the sultanate’s consumer price index – decreased to 3.6% in March 2022 compared with 4.0% recorded in February and 4.4% in January this year, according to data released by the National Centre for Statistics and Information (NCSI) on Monday. The consumer price index (CPI) for food and non-alcoholic beverages items, which have nearly 24% weight in Oman’s CPI, rose by 4.9% in March compared to the same month of the previous year. Within the food items, fish and seafood recorded a remarkable 9.6% drop in March prices compared to the previous month, while prices of most other food items increased during the month.

Among food items, the biggest price rise was recorded in cooking oil and fats which registered a 15% year-on-year increase in March. Cooking oil and fats recorded 10.6% increase in March prices compared to the previous month. Prices for vegetables rose 10.7% on year-on-year basis in March, while prices for fruits also increased by 6.1%. On the other hand, prices in transport group – which has more than 19% weight in the CPI – increased by 6.6% in March compared to the same month a year ago. Oman’s annual inflation rate has remained above three% level since October last year.

The sultanate’s inflation averaged under one% over the six years to 2019 and remained negative during 2020. The inflation rate returned to positive territory in April 2021 after remaining negative for more than a year. An increase in Oman’s inflation was expected last year following the implementation of value-added tax (VAT) in April 2021. Sharp price increases in transport group, fish and seafood, vegetables and tobacco products largely contributed to the overall inflation growth during 2021. International institutions such as the International Monetary Fund (IMF0, World Bank and global credit ratings agencies expect Oman’s inflation to remain above three% level this year. S&P Global Ratings expects inflationary pressure in Oman to rise moderately to 4.3% in 2022 due to higher commodity prices from Russia-Ukraine conflict.