Inflation in Oman

“Global Investment House” – Oman – Oman Economic Overview – Economic Report

Inflation in Oman
Inflation in Oman has been tamed from levels seen during the peak of the crisis; from 12.4% in 2008 through a gradual manner to 3.2% in 2010. Generally, reasons for the declining prices over the last three years are due to factors including, slower growth of food, beverages prices, which constitute a 30.4% weight in the CPI, in addition to the strengthening dollar which keep imports cheaper. The CPI in Oman is composed of 9 categories with Food, beverages and tobacco having the heaviest weight of 30.4%. This combined with rent, maintenance, and fuel 21.4% and communication and transport 22.2% form over 74% of the CPI basket. The lowest weights are assigned to medical care and recreation and entertainment with each constituting 1.72% and 2.67% of the CPI basket respectively. Batelco Training Centre hosted an Education Exhibition at Batelco Staff Centre recently to showcase the wide range of programmes available at some of Bahrain’s leading educational institutes. Among the providers that participated at this education exhibition were the University of Bahrain (UoB), Bahrain Polytechnic, Bahrain Training Institute (BTI), Bahrain Institute of Banking & Finance (BIBF) and Batelco Toastmasters Club.

According to IMF and Central Bank of Oman, inflation is expected to increase to 3.8% in 2011 and 3.3% in 2012. This is mainly backed by the new government expenditures implemented during the 1H-11 to address social and economical reforms in the Sultanate, reforms are expected to stimulate demand and ignite inflationary pressures. On the other hand, the expected decline in oil prices as well as the strength of the dollar would have a major impact cooling inflation and lowering imported inflation, up to the end of the year.

The report “Oman – Oman Economic Overview – Economic Report” was published by “Global Investment House” in January 2012.

Picture credit: Clay Irving (Oman Paper Money Collection)