(MENAFN- Muscat Daily) With global food and industrial commodity prices remaining stable, Oman's annual inflation, based on the consumer price index (CPI), fell sharply to 0.55 per cent in August, according to statistics released by National Center for Statistics and Information (NCSI). In July, prices rose 1.5 per cent from the previous year.
Price rise in the food, beverage and tobacco category - which has an over 30 per cent weightage in Oman's CPI basket - dropped sharply to 0.8 per cent in August from 3.1 per cent in July.
While the cost of most food items have remained stable for the past many months, some food commodities have even seen prices softening.
The prices of vegetables dropped by nearly eight per cent in August compared to the same period last year. The price of personal-care items and services, which has over six per cent weightage in CPI, also declined eight per cent in August on a year-on-year basis.
Dr Fabio Scacciavillani, chief economist at the Oman Investment Fund, said, ''Local inflation is mirroring the global trend of subdued prices. At the global level, industrial and food commodities are either stabilising or declining. Towards the end of the year we might observe some sort of further decline in inflation. I would not be surprised if inflation goes down to zero per cent or slightly in negative territory for a couple of months.''
''Low inflation provides an environment for conducive growth and reassures households on their income and living standards. Overall, it is positive sign for the economy,'' added Dr Scacciavillani.
NCSI statistics also showed that Oman's gross domestic product (GDP) at current prices grew just two per cent year-on-year in the first half of 2013, mainly due to a 3.3 per cent decline in petroleum GDP on lower oil prices.
Oman's total GDP reached to RO15.52bn in the first half of 2013 compared with RO15.22bn in the same period last year.
''GDP growth at current prices always reflects the price at which Oman sell its crude. Oil production has remained largely stable but the major impact has been from comparatively lower prices,'' said Dr Scacciavillani.
In a positive signal to government efforts at diversifying the economy away from oil and gas, Oman's total non-petroleum GDP rose by 8.3 per cent to RO8.27bn in the first half of this year against RO7.64bn in the same period of 2012.
''The above eight per cent growth in non-oil GDP is positive news, which means non-oil production in the economy is growing at a healthy rate,'' added Dr Scacciavillani.&nb
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