Muscat: Inflationary pressure within the local economy is easing with the average inflation rate for the first six months of this year hovering at merely 1.8 per cent, thanks to softening of global commodity prices, especially for agricultural products. This is against the government's inflation projection of 4 per cent for the entire year.
According to the monthly statistical bulletin released by the National Centre for Statistics and Information, there was only a marginal growth in prices of most of the products and services in the consumer products' basket. Inflation rate in Oman is mainly driven by price fluctuation in importing countries, which are mostly food grains and other products.
The price of food, beverage and tobacco, which accounts for over 30 per cent of the index, rose 2 per cent in June, mainly on account of an 8.8 per cent growth in vegetable prices and 3.4 per cent growth in fruit prices on year-on-year basis.
While prices of most other food products remained stable or showed a marginal growth, non-alcoholic beverages showed a 5.2 per cent growth.
In fact, the annual inflation rate in the Sultanate, which pegs its currency to the US dollar, peaked to 13.7 per cent in June 2008 amid imported price pressures, but has steadily retreated thereafter. Market analysts expect that the inflation rate to continue at the same level for the remaining months of the year, mainly due to the fact that there has been a slowdown in awarding of major projects.