Oman keeps inflation at a safe level, maintains real growth of economy

Muscat: The Ministry of Economy confirmed that the inflation rate in the Sultanate of Oman is stable at a moderate level, and significantly lower compared to the actual economic growth rate achieved during the Tenth Five-Year Development Plan 2021-2025.

This is an important achievement that demonstrates the ability of the Omani economy to continue growing and overcome challenges in light of the implementation of the objectives of the ‘Oman Vision 2040’ and the economic diversification strategy to raise growth rates, support the performance of various economic sectors, and drive them towards expansion and increase their added value to the national economy.

The Ministry explained that the Sultanate of Oman’s success in adapting to and overcoming the global inflation crisis, and keeping inflation at a safe level, has maintained the real growth of the economy and the stability of local price levels.

It noted that the average inflation in consumer price indices in the Sultanate of Oman reached 1.4 percent during the period 2021-2024, while the real growth rate of the gross domestic product rose to about 3.4 percent, exceeding the inflation rate and approaching the average growth target in the Tenth Plan of 3.5 percent.

The ministry noted that the average inflation rate from the beginning of the year until the end of the third quarter of this year was 0.80 percent, and that the gross domestic product achieved real growth of 2.3 percent during the first half of 2025 compared to the same period last year.

The inflation rate in the Sultanate of Oman is expected to reach about 0.9 percent on an annual basis by the end of this year, according to estimates by the International Monetary Fund.

The forecasts also indicate that the local economy will record real growth of about 2.9 percent in 2025, with a likely acceleration to about 3.7 percent in 2026, supported by the continued momentum of the non-oil sectors and the easing of oil production restrictions.

Regarding inflation developments during the Tenth Plan, the Ministry of Economy indicated that preparations for implementing the Tenth Plan came amidst the two crises of the pandemic outbreak and the effects of the decline in oil prices, which led to a contraction in economic growth and the recording of a negative inflation rate during 2020 at a rate of 0.4 percent due to the impact of these crises on economic activities.

Since the start of the implementation of the Tenth Plan in 2021, the inflation path in the Sultanate of Oman has remained within the target, including during 2022 , which witnessed the peak of the inflation escalation and its reaching record levels globally due to the repercussions of the pandemic and the Ukrainian war, which affected supply chains and the movement of global trade.

The ministry said that rising inflation was one of the most important global challenges during the implementation of the Tenth Plan, and the Sultanate of Oman adopted a number of policies and measures to reduce the repercussions of the crisis and maintain the stability of economic growth and local price levels.

This included a package of economic stimulus policies, accelerating the implementation of the economic diversification strategy, and programs to empower the private sector and attract investment.

The Sultanate of Oman has strengthened the stability of local prices through policies of stabilising fuel prices and supporting the prices of food commodities and a number of basic services, in addition to the course of monetary policy and the Central Bank of Oman’s alignment with the Federal Reserve’s directions towards bank interest rates according to the link between the Omani rial and the US dollar.

The economic, monetary and social policies have achieved an effective response to the crisis of escalating global inflation and have succeeded in limiting its rise.

These policies continue to guide the course of inflation in line with the social and economic objectives of the Oman vision 2040, and in line with global developments in inflation, especially in light of the uncertainty regarding inflation during the coming period, given the changes in the global economy and international supply chains due to the impact of protectionist policies and escalating global trade tensions.

The real global inflation rate was recorded at 5.8 percent in 2024. The International Monetary Fund’s latest World Economic Outlook report indicates that global inflation will continue to decline during the current year, with notable variations in its rates between countries and regions. Inflation is expected to rise above the target in the United States and slow down in other regions, including emerging and developing economies.

The IMF projects that the global average inflation rate will reach 4.2 percent by the end of 2025 and 3.7 percent during 2026. Under these conditions, the global economy is expected to slow down after recording growth of 3.3 percent in 2024, falling to about 3.2 percent in 2025 and then to 3.1 percent in 2026.

This slowdown reflects factors stemming from uncertainty and protectionist policies, as well as high levels of global debt and borrowing costs. On the positive side, progress in trade negotiations could lead to lower tariffs and reduce uncertainty about the future path of inflation.

Regarding local inflation developments during the current year, the Ministry of Economy stated that, geographically, consumer price indices in the Sultanate of Oman during the period from January to September 2025 indicate that the lowest inflation increases were recorded in the governorates of North Al Sharqiyah, South Al Batinah, North Al Batinah and Dhofar, at 0.16 percent, 0.21 percent, 0.41 and 0.51 respectively, while the highest increases were in the governorates of Al Dakhiliyah, Al Dhahirah, Musandam and South Al Sharqiyah, at 1.51 percent, 1.26 percent, 1.21 percent and 1.02 percent respectively, with increases ranging between 0.77 percent and 0.84 percent in the remaining governorates.

In the prices of the groups that make up the Consumer Price Index in the Sultanate of Oman, a number of groups witnessed a difference between stability and a slight increase, as the prices of the housing, water, electricity, gas and other fuels group, the tobacco group, the furniture, household equipment and routine household maintenance group, the communications group, the education group, the culture and entertainment group, and the clothing and footwear group remained stable.

As for the groups whose prices tended towards an increase, the miscellaneous goods and services group led the way with a percentage of 6.35 percent, the transport group with a percentage of 3.06 percent, the health group with a percentage of 1.86 percent, and the restaurants and hotels group with a percentage of 1.59 percent.

Regarding food price developments, consumer price indices in the Sultanate of Oman indicate that during the period from January to September 2025, food and non-alcoholic beverage prices declined by 0.55 percent.

Globally, the FAO Food Price Index rose 3.4 percent year-on-year, or 4.2 points, in September 2025 compared to the index level in September 2024, and remains 19.6 percent below its peak in March 2022. On a monthly basis, the index saw a slight decrease in September 2025 to 128.8 points compared to 129.7 points in August 2025, amid a decline in the price indices for cereals, dairy products, sugar, and vegetable oils, and an increase in the meat price index.