MUSCAT : This percentage is well within the target of 2.8 percent set by the government for the tenth five-year development plan (2021-2025).

Despite global inflationary pressures, the Omani economy has continued to grow at rates that exceed the inflation rate, with the GDP growing at an average rate of 3.9 percent between 2021 and 2023. The economy also recorded a 1.9 percent GDP growth from January to September 2024.

The Ministry of Economy attributed much of this positive performance to the efforts of global central banks, which have worked to reduce inflation through interest rate hikes, leading to a decline in global inflation in 2023. This has helped reduce the pressure of imported inflation on local markets and industries in Oman, thereby supporting the Sultanate’s monetary easing policy and lowering interest rates on lending.

Oman has continued to closely monitor inflation rates at both the national and governorate levels, with the goal of keeping inflation within target levels. The government has adopted various precautionary measures to mitigate the effects of rising global inflation, aiming to protect purchasing power and sustain economic growth.

For the fiscal year 2025, Oman increased public spending, with an estimated budget of approximately RO 11.8 billion, up from RO 11.65 billion in 2024. This includes allocations for social protection systems, development and housing loans, and support for key sectors such as electricity, water, and sanitation. The government has also committed RO 216 million in support for essential sectors like food, transportation, and waste management.

In terms of monetary policy, the Central Bank of Oman has been aligning its interest rate decisions with those of the US Federal Reserve due to the Omani riyal’s peg to the US dollar. This has helped manage liquidity and keep inflation under control. In line with the reduction in inflation, the Central Bank of Oman lowered the interest rate on repurchase operations to 5.00 percent by the end of 2024.

The inflation rate in Oman has continued to decline. According to data from the Ministry of Economy, the average inflation rate in 2024 was 0.60 percent, compared to 0.94 percent in 2023. The decline in inflation was driven by decreases in the prices of key items, such as food and non-alcoholic beverages, and transportation.

However, regional disparities in inflation remain, with Musandam Governorate recording the highest inflation rate of 1.32 percent, while Muscat had the lowest at 0.32 percent.

For all the latest news from Oman and GCC, follow us on Twitter, Instagram and LinkedIn, like us on Facebook and subscribe to our YouTube page, which is updated daily.