Decline in Oman’s Inflation

Despite the increase in prices of many food items, Oman’s annual inflation rate further decreased for the third straight month in April, thanks to the stability in prices of fuel, rent, water, electricity, communication and transportation.

Inflation rate – as measured by the sultanate’s consumer price index (CPI) – decreased to 2.67% in April 2022 from 3.6% in March 2022. The sultanate’s annual inflation was recorded at 4.0% in February and 4.4% in January this year, according to data released by the National Centre for Statistics and Information (NCSI).

However, consumer price inflation for food and non-alcoholic beverages group, which has nearly 24% weight in Oman’s CPI, rose to 5.43% in April 2022 compared to the same month of the previous year.

Global food prices have been soaring fast since the beginning of Russia’s invasion of Ukraine. Since Oman needs to import most of the food materials from international markets, rising global prices directly affect the prices in the local market.

Among food items, prices of cooking oil and fats rose nearly 15% year-on-year in April, but bread and cereals prices grew at a lower rate of 2.7%.

While meat prices recorded a 7.7% increase, prices of fish and seafood products jumped 6.5% in April on year-on-year basis. Consumer prices for vegetables remained 9.7% higher in April 2022 compared with the same month a year ago, and prices for fruits increased by nearly 8% on year-on-year basis.

On the other hand, prices in the housing, water, electricity, gas and other fuels group – which has over 26% weight in Oman’s CPI – increased only by 2% in April this year compared to April 2021. Prices in the transport group – which has more than 19% weight in CPI – increased by 2.4% in April 2022 compared to the same month a year ago.

Oman’s annual inflation rate has first time dropped below 3% level since October last year.

International institutions such as the International Monetary Fund, World Bank and global credit ratings agencies expect Oman’s inflation to remain above 3% level in 2022.