CPI Housing Utilities in Oman remained unchanged at 105 points in July from 105 points in June of 2022.

Muscat :

Households in Oman and other GCC countries have been insulated from rising global inflation due to government measures that capped prices of fuel and essential commodities and diversified food import sources.

Most of advanced and emerging market economies are dealing with soaring fuel and food prices this year. Global inflation has sharply increased driven mainly by the Russia-Ukraine conflict and supply problems due to COVID-19 related restrictions implemented in 2020 and 2021.

Inflation in Oman and the GCC has been significantly lower than most of advanced and emerging market countries.

‘The GCC countries, despite importing up to 90 per cent of their food supplies, have weathered the Russia-Ukraine conflict-related food supply chain disruption mainly by having varied food import sources. Government price caps on essential food items and fuel also insulated households from steep food and fuel price rises,’ Kamco Investment said in a research note.

Inflation rate in Oman increased by 2.9 per cent year-on-year during June 2022. Comparatively Oman’s inflation rate stood at 4.4 per cent at the beginning of this year.

Despite the growing global inflationary pressures, inflation outlook in Oman remains moderate and does not pose any imminent concern for financial stability in the sultanate, the Central Bank of Oman (CBO) recently said in its Financial Stability Report 2022.

As per the CBO, inflation expectations for over half of the consumer basket in Oman remain low. Moreover, higher oil revenues have provided more fiscal space to the government for targeted intervention [such as subsidies] to offset any inflationary pressures to complement monetary actions taken by CBO.

In its latest Regional Economic Outlook, the International Monetary Fund said GCC inflation rate will witness a growth of 3.3 per cent in 2022 and 2.3 per cent for 2023. The IMF expects Oman’s inflation to average 3.7 per cent this year, which is well below the global average.

source: tradingeconomics.com