Muscat: According to the Ministry of Economy, average inflation in the consumer price index stood at 0.94 percent during the period from January to November 2025, in line with expectations for the year. The Ministry noted that domestic inflation remains moderate within the target range, with global inflationary pressures remaining relatively limited despite tariff escalations and shifts in international trade policies that cast uncertainty over future price trends.

The Ministry attributed the sustained moderation in inflation during the Tenth Five-Year Plan (2021–2025) to early government intervention since 2021, including targeted support for food commodities and essential services. These measures helped shield local markets from imported inflation and protected economic growth, purchasing power and living standards.

Maintaining moderate inflation, the Ministry said, has supported economic expansion amid a broader easing of monetary policy. Lower interest rates have boosted domestic demand, increased liquidity and encouraged investment across key sectors such as industry, construction, mining and transportation, while also reducing borrowing costs for the private sector.

In line with this approach, the Central Bank of Oman continued its policy of monetary easing in 2025, aligned with US Federal Reserve decisions and the rial’s peg to the US dollar. Interest rates on repurchase operations with local banks were cut several times, declining from 5 percent at the end of 2024 to 4.25 percent by December 2025.

Banking data underscores the impact of these measures. Total bank credit grew by 9 percent to reach OMR 34.7 billion by the end of October 2025, while credit to the private sector increased by 5.8 percent to OMR 28.3 billion. The ministry said this growth reflects a recovery in economic activity, supported by stimulus programmes and diversification initiatives under Oman Vision 2040.

To further strengthen private sector participation, the government has rolled out successive financing and investment initiatives, including the launch of the Oman Future Fund, capital increases for the Development Bank, and the “Sustainability” programme to develop capital markets and the banking sector. Under this programme, incentives were introduced to encourage listings on the Muscat Stock Exchange, alongside the launch of the Promising Companies Market aimed at family businesses and SMEs.

On price movements, consumer data showed a 0.33 percent decline in food and non-alcoholic beverage prices between January and November 2025, while prices in housing, utilities, tobacco, communications, culture and entertainment remained stable. Modest increases were recorded in clothing and footwear (0.44 percent), education (0.45 percent), and household furnishings (0.45 percent). Larger increases were seen in miscellaneous goods and services (6.8 percent), transport (3.2 percent), restaurants and hotels (1.8 percent), and health (1.5 percent).

Regionally, inflation was highest in Al Dakhiliyah Governorate at 1.63 percent and lowest in North Al Sharqiyah at 0.29 percent, with most other governorates recording rates close to or below one percent.

Other indicators pointed to easing producer prices, with the Producer Price Index declining by 4.3 percent year-on-year in the third quarter of 2025, driven by lower mining and manufacturing prices. In contrast, import prices rose sharply by 15.2 percent, reflecting higher global prices for beverages, tobacco, machinery, transport equipment and manufactured goods.

Globally, inflation trends showed moderation. Core inflation rose by 2.6 percent in November 2025, while overall inflation stood at 2.7 percent. The World Bank Group has forecast that global commodity prices will continue to decline for a fourth consecutive year in 2026, reaching their lowest levels in six years. Meanwhile, the Food and Agriculture Organization reported that its Food Price Index fell for a third straight month in November 2025, remaining nearly 22 percent below its March 2022 peak.