How Oman placed 2025 inflation at 0.81%: through subsidy, controlled imports, and stable food supply. world News
TL; Dr:
Oman Inflation increased 0.81% in the first five months of 2025 compared to the same period in 2024.
- Import prices increased by 1.3%, producer prices rose 4.1% in Q1.
- Cheap vegetables and seafood led to a slight decline in food inflation; The highest price hike seen in diverse goods and services (+6.04%).
- Regional variation: in the highest
Al Dakhiliah (1.58%), Musandam (1.51%); LowestAl Batinah (.0.04%).
According to CPI data released by the Ministry of Economy, Oman’s overall inflation during January -mai 2025 increased by 0.81% during January -mai 2025. While the cost of imports and producers move upwards, strong food price control and government support helped reduce overall pressure on homes.
Inflation driver: import and productive costs
A slight increase in inflation of Oman can be attributed to a large extent for the changes in the prices of external costs, especially imports and production. The import price index increased by 1.3%, indicating moderate risk for global supply chain pressures and ups and downs in commodity. In particular, imported food and construction materials were significant contributors for growth, although the effects were long softened by trade relations and wholesale procurement strategies. Meanwhile, the producer Price Index jumped 4.1% in Q1 2025 as compared to the same period last year. This growth mainly reflects high input costs in manufacturing and energy-intensive areas such as cement, metal and transport. However, thanks to Oman’s active fiscal management and diversification efforts, the pass-through for consumers remained relatively low.
Food prices provide relief
Amidst global concerns on food security, Oman has succeeded in keeping food inflation under control, reflecting its domestic agricultural initiatives and the success of subsidy. Food and non-alcohol beverage prices fell 0.17%, according to the Oman News Agency, with a noticeable fall in vegetables (-4.63%), seafood (-3.69%), and meat (-0.13%). Government procurement programs, which in association with seasonal domestic supply from Dhfra and Al Batinah areas, contributed to keeping prices stable. Other staples such as bread, grains and non-or-ordeal beverages were also seen to be marginal decline. However, inflation was seen in sugar and sweets (3.13%), dairy and eggs (2.88%), oil and fats (1.28%), and fruits (1.05%), due to high -scale Ramadan and summer tourism peaks due to high imports and regional demands during tourism peaks. Nevertheless, the overall food basket remains stable, avoiding instability seen in other parts of the Gulf.
Category trends: beyond necessary
Beyond the food, the fastest price increased at 6.04%, incorporating personal care, financial services and insurance in diverse goods and service sections. The cost of healthcare increased by 2.71%, partly due to high medical input costs and increase in demand for private services. The transport category also recorded a 2.68% increase, mostly due to vehicle maintenance and insurance costs, while hotels and restaurants increased by 1.08% due to strong tourist flow and peak season tariffs. In particular, tobacco and telecom costs remained stable, reflecting government regulation and value monitoring efforts.
Regional inflation paradigm
Inflation levels vary with inland and tourism-water areas showing high growth with inland and tourism-water areas:
- Al Dakhiliah (1.58%) and Musandam (1.51%) posted the highest rates due to increase in costs related to transport and services.
- Moderate growth was also observed in other areas such as South Al Shaarkiah (1.24%), Al Dahirih (1.09%), and Al Wasta (1.06%).
- On the other hand, South Al Batinah recorded a marginal deflation of -0.04%, possibly connected to oversuply in food production and low transport costs due to the upgradation of the infrastructure.
- Northern regions such as Northern Al Shaarkiah (0.21%) and North Al Batinah (0.42%) maintained inflation below national average.
why it matters
- Consumer relief: With subsidy in place, the basic needs such as food, utilities, and fuel remained stable for the protection of purchasing power for homes with low and medium -income.
- Macroeconomic flexibility: The inherent inflation supports the comprehensive economic goals of Oman, especially mentioned in the Vision 2040 and Tenth Five Year Plan.
- Cushion effect: Continuous expansion in agriculture, fisheries and logistics helped to offset instability in import-baron areas.
- Investor attentive: A low, approximate inflation environment for investors confidence is important, especially Oman wants to diversify its economy and attract FDIs in logistics, tourism and green energy.
Oman’s moderate inflation through the first five months of 2025 refers to the economy that balances external cost pressures with effective internal controls of 0.81%. Strategic food safety measures, fiscal discretion, and increasing self -sufficiency in agricultural production have contributed to all increase prices. With regional inflation inequalities and overall consumer prices have been largely under control, Oman is on track to maintain economic stability, creating long -term flexibility.
