Muscat – This figure is significantly lower than the 2.8 percent target set as an annual average under the Tenth Five-Year Plan. The Ministry noted that inflation, as measured by the Consumer Price Index (CPI), remained within acceptable bounds during the first two months of 2025 and is expected to stay within the forecast range throughout the year.
Dr. Salem bin Abdullah Al Sheikh, official spokesperson for the Ministry of Economy, attributed this stability to Oman’s progress in strengthening its financial position and advancing sustainability goals under Oman Vision 2040. He highlighted that this progress has allowed the government to implement proactive economic and monetary measures that have helped contain inflation, despite ongoing global challenges.
According to the Ministry, statistical data showed that the inflation rate declined by 0.32 percent in February 2025 compared to January. The annual inflation rate for February stood at 1 percent compared to the same month in 2024. This stability is largely due to the consistency in prices across several key categories, including housing, water, electricity, gas, tobacco, and communications. While there were limited increases in sectors such as food and non-alcoholic beverages, clothing, household goods, education, and hospitality, the most notable increases were observed in the health group (3.2 percent), transportation (3.4 percent), and miscellaneous goods and services (6.3 percent).
Regionally, the Ministry reported variations in inflation rates across the governorates. The highest inflation in February 2025 was recorded in Musandam and Al Dakhiliyah Governorates at 1.8 percent, followed by South Al Sharqiyah and Al Wusta at 1.5 percent. Al Dhahirah saw a rate of 1.2 percent, while Muscat, Dhofar, and Al Buraimi Governorates each recorded around 1 percent. The lowest inflation rates were in North Al Batinah (0.6 percent), North Al Sharqiyah (0.5 percent), and South Al Batinah (0.1 percent).
The Ministry also highlighted a 2.5 percent decline in Oman’s import price index in the fourth quarter of 2024 compared to the same period in 2023. This decline was driven primarily by a 25.2 percent drop in the prices of mineral fuels and lubricants, and a 15.8 percent decline in the prices of industrial machinery and transportation equipment. However, price increases were observed in other categories, including various manufactured goods (14.4 percent), oils and fats (11.9 percent), food and live animals (9.1 percent), chemicals (8 percent), and beverages and tobacco (6.2 percent).
Dr. Al Sheikh emphasised that the global decline in inflation over the past two years was a result of central banks worldwide raising interest rates since 2021 to combat inflationary pressures that surged following the COVID-19 pandemic. These measures have yielded positive results, with inflation gradually decreasing toward target levels in 2023 and 2024, prompting several central banks to begin lowering interest rates. The International Monetary Fund (IMF) projects global inflation to decline to 4.2 percent in 2025 and further to 3.5 percent in 2026.
Nonetheless, the Ministry cautioned that global inflation remains a concern amid rising protectionist trade policies and the imposition of new tariffs, which could disrupt progress. Global food prices, according to the Food and Agriculture Organization (FAO), rose by 1.6 percent in February 2025 compared to January, with annual food inflation reaching 8.2 percent. Sugar, dairy products, and vegetable oils saw the largest increases, though food prices remain below their peak in early 2022.
