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INFLATION UNDER CONTROL

Oman economy to grow 5pc this year

Doha, September 18, 2012

Oman's economy is expected to grow by 5 percent this year, while inflation in the small oil exporter should reach 3 percent in 2012, Central Bank executive president Hamood Sangour al-Zadjali said on Tuesday.
 
Asked if he was concerned about the impact of rising global food prices on domestic inflation, Zadjali said: "No, at the moment inflation is under control. We expect a rate of about 3 percent for this year."
 
Zadjali, who was speaking on the sidelines of a financial conference in the Qatari capital, also said he believed the International Monetary Fund's estimate for Oman's unemployment rate of 24.4 percent was too high.
 
"I'm not sure of the actual number, but it's lower than what the IMF said," he said.
 
Asked if he thought that monetary policy was in line with economic fundamentals, Al-Zadjali told reporters: "Yes, very much so. We try to maintain an easy monetary policy to help the development of the economy."
 
Oman lacks a fully independent monetary policy because its rial currency is pegged to the US dollar. Its central bank has been keeping a loose policy stance since early 2009 as inflation slowed sharply from double-digit rates seen in 2008.
 
In July, the central bank said there was scope to pursue accommodative monetary and fiscal policies in the rest of 2012 without jeopardising macroeconomic stability of Oman.
 
The interest rate which it uses to drain excess liquidity from the market stood at 0.07 percent at its weekly auction of deposit certificates on September 12.- Reuters



Tags: Oman | economy | growth |

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