Inflation in Oman remains moderate at 0.81%
This relatively moderate inflation rate coincided with a 1.3 per cent increase in the general import price index and a 4.1 per cent rise in the general producer price index by the end of Q1 2025.
Inflation trends varied across the governorates. Ad Dakhiliyah recorded the highest rate at 1.58 per cent, followed by Musandam (1.51%), South Al Sharqiyah (1.24%), Al Dhahirah (1.09%), and Al Wusta (1.06%). Meanwhile, inflation declined slightly in South Al Batinah (-0.04%) and remained lowest in North Al Sharqiyah (0.21%) and North Al Batinah (0.42%). The remaining governorates saw inflation below 1 per cent.
Dr Salem bin Abdullah al Sheikh, the Ministry's official spokesperson, attributed the subdued inflation to a drop in food and non-alcoholic beverage prices, along with price stability in the housing, water, electricity, gas, and fuels segment. These two groups represent over half of the consumer spending basket in Oman.
Between January and May 2025, prices of food and non-alcoholic beverages dropped by 0.17 per cent compared to the same period in 2024. Specific food categories saw significant decreases, including vegetables (-4.63%), fish and seafood (-3.69%), meat (-0.13%), non-alcoholic beverages (-0.11%), and bread and cereals (-0.01%). However, prices increased for sugar, jam, honey, and sweets (+3.13%), dairy products and eggs (+2.88%), oils and fats (+1.28%), fruits (+1.05%), and other food items (+3.40%).
The highest inflation among all categories was seen in the miscellaneous goods and services group, which rose by 6.04 per cent. Other notable increases were in health (+2.71%), transport (+2.68%), and restaurants and hotels (+1.08%). Prices for tobacco and communications remained largely stable, with marginal changes in the remaining CPI categories.
Dr Al Sheikh highlighted that the stability in food prices reflects the slower pace of global price increases and the continued implementation of government subsidies for essential goods and services. Additionally, Oman's ongoing improvements in food production, supply chains, and marketing are supporting the country's food security strategy and goals under the Tenth Five-Year Plan (2021–2025).
Agriculture and fishing—key components of food security—grew by 2.8 per cent in 2024, contributing RO 987 million to the GDP at constant prices. In the first quarter of 2025, this growth accelerated to 7.6 per cent, with a contribution of RO 273.6 million.
To support this growth, Oman has continued to invest in infrastructure supporting food supply and trade across governorates. Over 80 projects—including markets, slaughterhouses, and retail outlets—were implemented under the Governorate Development Program from 2021 to 2024. Current projects include the Shaleem slaughterhouse, the Mawarid Market in Sinaw, an agricultural products centre in Dhofar, a fisheries and food industries complex in Duqm, and a cold chain facility also in Duqm. The 'Silal' Central Market in Khazaen Economic City has also been inaugurated, acting as a key hub for fresh produce distribution.
Globally, the Food and Agriculture Organization (FAO) reported a 6.0 per cent year-on-year increase in its Food Price Index (FPI) in May 2025, though the index declined by 0.8 per cent from April to May. Dairy and meat prices rose, while prices for cereals, sugar, and vegetable oils fell.
Dr Al Sheikh concluded by warning that if trade protectionism worsens, global inflation could rebound—potentially undermining the progress made by central banks worldwide in curbing inflationary pressures. — ONA
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