Oman
Records 0.81% Average Inflation Rate in First Five Months of 2025
Muscat,
6 Jul (ONA) — The Sultanate of Oman witnessed an average inflation rate of 0.81
percent during the first five months of 2025 compared to the same period last
year, according to the Consumer Price Index data released by the Ministry of
Economy.
The
report indicated a 1.3 percent increase in the general import price index and a
4.1 percent rise in the producer price index by the end of the first quarter of
2025 compared to the corresponding period in 2024.
Geographical
distribution showed varying inflation rates across governorates, with South Al
Batinah recording a marginal decline of 0.04 percent, while A’Dakhiliyah
registered the highest rate at 1.58 percent, followed by Musandam at 1.51
percent and South A’Sharqiyah at 1.24 percent. More moderate increases were
seen in North A’Sharqiyah (0.21 percent) and North Al Batinah (0.42 percent),
with other governorates remaining below one percent.
Dr.
Salim Abdullah Al-Sheikh, Official Spokesperson for the Ministry of Economy,
stated that the moderation in consumer price inflation was driven by declining
prices in the food and non-alcoholic beverages category alongside stable
housing, water, electricity, gas, and fuel prices. These two categories account
for over half of the consumer price index weight in Oman.
He
pointed out that detailed inflation data revealed a 0.17% decrease in food and
beverage prices between January-May 2025 compared to the same period last year.
Significant price reductions were recorded for vegetables (-4.63%), seafood
(-3.69%), meat (-0.13%), non-alcoholic beverages (-0.11%), and bread/cereals
(-0.01%). Conversely, sugar/jam/honey/sweets rose 3.13%, dairy/eggs increased
2.88%, fruits grew 1.05%, oils/fats climbed 1.28%, and other food items jumped
3.40%.
He
added that the miscellaneous goods/services category showed the highest
inflation at 6.04%, followed by healthcare (2.71%), transport (2.68%), and
restaurants/hotels (1.08%). Tobacco and communications prices remained stable
with minimal increases in other CPI components.
Al-Sheikh
attributed food price stability to moderated global commodity trends and
sustained government subsidies on essentials, coinciding with progress in
Oman’s Tenth Five-Year Plan (2021-2025) food security strategy. This strategy
enhances domestic food production, processing, and marketing systems to boost
agricultural/fishery output, increase self-sufficiency, and reduce food
imports.
He
pointed out that the agriculture and fisheries sectors grew 2.8% in 2024,
contributing RO 987 million to GDP at constant prices, with growth accelerating
to 7.6% (RO 273.6 million) in Q1 2025.
To
strengthen food security, Oman has developed over 80 markets, slaughterhouses,
and kiosks since 2021 under its governorates development program, he
explained.
He
said that current projects include the Slaughterhouse in Shaleem &
Halaniyat Islands, Sinaw Resources Market, Dhofar’s Agricultural Products Hub,
and Duqm’s Food/Fishery Industrial Complex with cold chain facilities. The
“Silal” Central Market in Barka in South Al Batinah, operational
since 2024, serves as advanced distribution channel for local farm produce.
Meanwhile,
the FAO Food Price Index recorded a year-on-year increase of 7.2 points (6.0%)
in May 2025 compared to the same month last year. On a monthly basis, the index
averaged 127.7 points in May 2025, reflecting a slight decline of 1.0 point
(0.8%) from April 2025. This movement was driven by rising prices in dairy and
meat products, while cereals, sugar, and vegetable oils experienced price
declines.
Economic
observers have expressed growing concerns about potential resurgence in
inflation should trade protectionism policies intensify. Such developments
could undermine the efforts of central banks that have successfully achieved
significant inflation reduction since last year.
The
U.S. Federal Reserve expected that tariff increases implemented in April might
lead to price hikes later this year, though the full impact has not yet
materialized in inflation figures. While U.S. inflation has declined
substantially from its 2022 peak, it remains above the Fed’s 2% target.
At
its June meeting, the Federal Reserve maintained its benchmark interest rate at
4.25-4.5%, unchanged since December 2024, while signaling potential for two
rate cuts in 2025. It simultaneously revised its inflation forecast upward to
3% for 2025 and lowered its U.S. GDP growth projection to 1.4%.
Within
the same context, the International Monetary Fund, in its April 2025 World
Economic Outlook report, adjusted its global inflation projections upward to
4.3% for 2025 and 3.6% for 2026. The report anticipates stronger inflationary
pressures in advanced economies, contrasting with expected moderation in some
emerging markets and developing economies.
——
Ends/AH
