Inflation in Oman averaged 1.4% during 2021-2024

Muscat: The average rate of the Sultanate of Oman’s actual inflation from 2021 to the end of 2024 stood at about 1.4 percent. It rested at a moderate rate and within the 2.8 percent target set for the years of the tenth five-year development plan 2021-2025.

The Omani economy continues to grow at rates exceeding the inflation average. The actual average growth of the Gross Domestic Product (GDP) at constant prices stood at 3.9 percent between 2021 and 2023.

The budget for the current fiscal year (2025) saw the augmentation of the volume of public spending and the consolidation of the clause of contributions and other expenditures. In the same budget, public spending was estimated at about OMR11.800 billion, compared to OMR11.650 billion in 2024.

The current budget included allocations for the social protection scheme to the tune of about OMR577 million, while a sum of OMR73 million was allocated to subsidise the interests of “development and housing loans”, OMR520 million to support the electricity sector, OMR194 million to support the water and wastewater sector and OMR216 million to support petroleum products, food commodities, the transport sector and the waste sector and other sectors.

In terms of the monetary policy of the Sultanate of Oman, with Omani Rial being pegged to US Dollar, the Central Bank of Oman (CBO) has been keen on keeping pace with the decisions of the US Federal Reserve—in view of bank interest rates. The overall aim is to strike a balance between supply and demand for liquidity and to limit the rise in the inflation rate.

In line with a trend towards monetary easing after the decline in the inflation rate, the CBO cut down the interest rate on repurchase operations for local banks during 2024, thus bringing the interest rate to 5 percent by the end of 2024.

The Ministry of Economy explained that the annual inflation data indicates a continued decline in the inflation rate according to the consumer price index in the Sultanate of Oman. The average of annual inflation stood at about 0.60 percent during the period from January to December 2024, compared to about 0.94 percent during the corresponding period in 2023.