Oman July inflation hits 27-month high
Muscat, September 25, 2011
Inflation in Oman climbed to a 27-month high of 4.6 per cent on an annual basis in July and prices grew 0.5 per cent on the month mainly due to a rise in food prices, data from the country's finance ministry showed on Sunday.
Analysts have expected prices in the non-Opec oil producer, which was hit by public unrest earlier this year, to edge higher on robust global commodity prices as well as additional government spending to defuse social tensions.
The sultanate's economy is seen expanding by 4.1 per cent this year, helped by the government's increased infrastructure spending, after an estimated 4.2 per cent growth in 2010.
Meanwhile, Oman's economy should expand by 5 per cent this year, faster than other forecasts, while inflation is likely to remain at around current levels, a senior central bank official said in August.
The sultanate's economy expanded by 3.6 per cent in real terms in the first half of the year bolstered by the hydrocarbon sector, a finance ministry official said.
'Inflation is being driven by the same upward pressure on food prices that we are seeing in other parts of the region,” said Simon Williams, Mena chief economist, HSBC, Dubai.
'The numbers may pick up a little further when they capture the seasonal Ramadan effect, but over the rest of the year the pace of price growth is likely to moderate,” he added. – Reuters