Oman Says Inflation Rate Stable in the Country

The Ministry of Economy of Oman has claimed that the inflation rate in the Sultanate of Oman is low and stable, and significantly below the economic growth achieved during the Tenth Five-Year Development Plan (2021-2025).

Officials labelled the performance as a key sign of the economy’s resilience as Oman pushes ahead with the goals of Oman Vision 2040 and its diversification strategy.

According to the ministry, Oman’s success lies in adapting to and overcoming the global inflation crisis and keeping inflation at what it described as “safe levels.” It further noted that average inflation between 2021 and 2024 stood at 1.4 percent, while real GDP grew by about 3.4 percent, exceeding the inflation rate and approaching the average growth target in the Tenth Plan of 3.5 percent.

The ministry stated that the average inflation rate from the beginning of the year until the end of the third quarter of the current year was 0.80 percent, and that GDP achieved real growth of 2.3 percent during the first half of 2024 compared to the same period last year.

The International Monetary Fund (IMF) expects Oman’s inflation to end the year at around 0.9 percent and forecasts economic growth of 2.9 percent in 2025, rising to 3.7 percent in 2026 as non-oil sectors strengthen and oil production constraints ease.

Regarding inflation developments during the Tenth Plan, the Ministry of Economy indicated that the Tenth Plan began under the dual pressures of the COVID-19 pandemic and declining oil prices, which resulted in a contraction in growth and a negative inflation rate of 0.4 percent in 2020.

Despite global price shocks in 2022, Oman kept inflation within target through a package of measures, including economic stimulus policies, accelerated diversification efforts, and support for private investment.

Since the start of the implementation of the Tenth Plan in 2021, the inflation path in the Sultanate of Oman has remained within target, including during 2022, which witnessed the peak of inflation escalation and its reaching record levels globally due to the repercussions of the pandemic and the Ukrainian conflict, which affected supply chains and the movement of global trade.

The Sultanate of Oman has strengthened the stability of local prices through policies of stabilizing fuel prices and supporting the prices of food commodities and a number of basic services.

This stability is in addition to the course of monetary policy and the Central Bank of Oman’s alignment with the Federal Reserve’s directions towards bank interest rates, which is due to the link between the Omani rial and the US dollar.