Oman’s Inflation Remains Within Targets at 0.94% in 2025

Oman Maintains Price Stability Amid Global Economic Uncertainty

Muscat: The Ministry of Economy has confirmed that the inflation trajectory in the Sultanate of Oman during 2025 remained in line with projections, which estimated an average rate of around 1 percent. Data from the Consumer Price Index (CPI) showed an average inflation rate of 0.94 percent from January to November 2025.

The Ministry noted that inflation at the local level continues to follow a moderate path within targeted ranges. Globally, inflationary pressures remain relatively contained despite uncertainties arising from international trade policy shifts and rising customs duties, which continue to pose potential risks to future inflation trends.

The Ministry explained that the moderation of inflation throughout the years of the Tenth Five-Year Plan (2021–2025) was the result of proactive government policies aimed at containing global inflationary pressures since 2021. These measures included targeted support for food commodities and essential services, which helped cushion local markets from global price shocks, safeguarded purchasing power, and supported economic growth.

Maintaining moderate inflation has contributed to stimulating economic activity, particularly following the Central Bank of Oman’s shift toward monetary easing. In line with decisions by the US Federal Reserve and Oman’s policy of pegging the Omani Rial to the US Dollar, the Central Bank of Oman reduced repo interest rates several times in 2025, lowering them from 5 percent at the end of 2024 to 4.25 percent by December 2025.

This easing supported liquidity levels and reduced financing costs for the private sector. Banking sector data for 2025 indicated that total credit reached RO 34.7 billion by the end of October, reflecting a growth of 9 percent, while credit to the private sector increased by 5.8 percent to RO 28.3 billion.

The Ministry stressed that facilitating access to finance remains a strategic enabler for empowering the private sector as a key partner in sustainable development and a primary driver of growth under Oman Vision 2040.

In terms of CPI components from January to November 2025, prices of food and non-alcoholic beverages declined by 0.33 percent, while housing, water, electricity, and telecommunications remained broadly stable. Prices of miscellaneous goods and services increased by 6.8 percent, transportation by 3.2 percent, restaurants and hotels by 1.8 percent, and health services by 1.5 percent. Clothing and education recorded marginal increases of around 0.45 percent.

Regionally, A’Dakhiliyah Governorate registered the highest inflation rate at 1.63 percent, followed by A’Dhahirah (1.54 percent) and Musandam (1.21 percent). North A’Sharqiyah Governorate recorded the lowest inflation rate at 0.29 percent.

The general Producer Price Index (PPI) declined by 4.3 percent by the end of the third quarter of 2025 compared to the same period in 2024, driven by lower prices in mining, quarrying, and manufacturing. In contrast, the Import Price Index rose by 15.2 percent, influenced by a 34.7 percent increase in beverages and tobacco prices and a 12.1 percent rise in machinery and transport equipment.

The Ministry added that global commodity prices are expected to continue declining into 2026, reaching their lowest levels in six years. The FAO Food Price Index also fell for the third consecutive month in November 2025, remaining nearly 22 percent below its peak recorded in March 2022.