omani shop at supermarket - plastic bags - afp photo
Muscat: The Ministry of Economy in the Sultanate of Oman said that inflation rates for the current year remained at safe levels and much lower than global rates, as inflation recorded an increase of 1.5% in July 2024 compared to the same month last year, while cumulative inflation rose by 0.53% during the period from January to July 2024 compared to the same period in 2023. The increase is due to the increase in prices in major groups such as food commodities and non-alcoholic beverages (2.96%), miscellaneous personal goods and services (63.1%), and tobacco (1.47%), while transportation prices decreased (2.96%), education (0.41%), and communications (0.12%).
At the geographical level, all governorates witnessed an increase in inflation rates during the period from January to July 2024, with North Al Sharqiyah Governorate recording the highest inflation rate of 1.43%, followed by Al Wusta Governorate (1.15%), and Musandam Governorate (1.05%). The variation in inflation levels between governorates is due to multiple factors such as transportation costs and geographical location.
Data released by the National Center for Statistics and Information also showed that the producer price index rose by 3.3% in the second quarter of 2024 compared to the same quarter of 2023, driven by an increase in the prices of the mining and quarrying group by 5.2%, and the prices of manufacturing industries by 0.5%, while the prices of some subgroups decreased, such as beverages (10.2%) and rubber and plastic products (8.7%).
On the other hand, the import price index increased by 4.9% during the first quarter of 2024 compared to the last quarter of 2023, and by 3.7% compared to the first quarter of 2023, driven by an increase in the prices of non-food raw materials (19%) and miscellaneous manufactured goods (11.2%).
The Ministry of Economy explained that the integration between economic, financial and monetary policies helped maintain the local price inflation rate at its targeted levels. Among the measures that contributed to containing inflation were stabilizing fuel prices, in addition to implementing economic diversification trends during the tenth five-year plan, which aims to enhance local production and reduce imports.
Oman’s non-oil exports also witnessed a significant increase, with exports to Saudi Arabia amounting to OMR 1.047 billion, and to the UAE OMR 943 million in 2023, representing 27% of the Sultanate’s total non-oil exports. Oman’s imports from the UAE amounted to OMR 3.9 billion, from Saudi Arabia OMR 1.8 billion, and from Kuwait OMR 670 million, representing 42% of total imports in 2023.
The Sultanate of Oman continues to support local industries and products through the National Local Content Policy for the period 2024-2030, which aims to develop local content at the level of the national economy and increase the competitiveness of local industries globally.
Globally, the IMF report indicated that global inflation continues to gradually decline, with expectations of reaching 5.9% in 2024. However, central banks may remain cautious about cutting bank interest rates, for fear of undermining efforts to contain inflation. The Food and Agriculture Organization’s Food Price Index also recorded a slight decline in July 2024 compared to the previous month, with lower prices for cereals and higher prices for vegetable oils, meat and sugar.
