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Food spurs Oman inflation to fresh record in April

Reuters - Tuesday, June 17

DUBAI, June 16 - Inflation in Oman accelerated to a record 12.4 percent in April as soaring food prices and rents intensify price rises across the world's biggest oil-exporting region.

Food, beverage and tobacco costs -- which account for almost a third of the consumer price index -- jumped 21.6 percent in the year to April 30, the Omani Ministry of National Economy said on its website on Monday.

Rents also underpinned the index's 11th straight monthly rise, surging 16.2 percent in April.

Oman's consumer price index hit 122.1 points on April 30 compared with 108.6 points a year earlier, the data showed. Prices rose 1.2 percent over March.

Inflation is accelerating across the Gulf Arab region, where most countries, including Oman, peg their currencies to the ailing dollar, which is driving up import costs.

Gulf economies are booming following the rise in oil prices to repeated record highs, which is driving investment in infrastructure, industry and real estate.

In response to inflation, Gulf governments have increased price controls, boosted subsidies and raised employee wages.

Earlier this year, Oman's ruler, Sultan Qaboos bin Said, ordered an increase of up to 43 percent in state workers' wages.

Oman's central bank raised bank reserve requirements for the third time in less than a year last week to force lenders to keep more money in their vaults as a means of slowing down money supply growth.

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