Annual inflation in Oman rose to a record 13.2 percent in May as a global food crisis, high commodity prices and a currency peg to the weak US dollar pushed costs in the Gulf state higher for a 13th straight month. Food, beverage and tobacco costs-which account for almost a third of the consumer price index-jumped 22.9 percent, the Oman Ministry of National Economy said in a monthly report on its website.
Inflation is soaring across the world's biggest oil-exporting region, where economies that have boomed on a more than seven-fold rise in oil prices since 2002 are getting bitten by higher import costs. Oman and most of its neighbours, including Saudi Arabia, peg their currencies to the US dollar, which is driving up import costs.
"It's a vicious circle," said Giyas Gokkent, head of research at National Bank of Abu Dhabi. "There is negative sentiment in the US financial sector outlook which has resulted in a much weaker dollar and commodity prices have jumped," he said.
Inflation in Oman has been accelerating since May 2007, with the consumer price index jumping to 123.2 points on May 31, compared with 108.8 points a year earlier, ministry data showed.