Oman suffers inflation!!

A sharp increase in the rate of inflation has been noted in Oman in the month of September with high figures reaching up to 4.2 percent and this is very high as compared to the past years rate which was 1.3 percent. The Ministry of National Economy provided data which proved that prices of food, beverages and tobacco increased by 2.6 percent. Not only food prices increased, prices of furniture and household equipments also increased by 0.2 percent. The entertainment services increased by 0.7 percent which is also pretty much high.

Though there was a decline in the prices of some commodities but still we see a rise in the prices of food products in September which was surprising. People were surprised as the prices of marine products and fish decreased and then suddenly they saw prices of vegetables, fruits, meat, chicken, salt and spices rising. Poor people are at the biggest advantage as these are the most basic commodities which everyone needs for a living. The result will be that poverty will increase sharply day by day after this inflation as it is happening in Pakistan. Poor people are becoming poorer and rich people are becoming richer and richer. This way the gap between the rich and the poor keeps increasing leading to inequality in a country.

Consumer price index for essential groups declined for the month of September 2010 such as transportation, telecommunication and textiles. Some divisions remain unchanged as compared to the previous month such as electricity, water, educational and medical services. But still there is inflation which is something to worry about as inflation creates difficulty for businesses by creating uncertainty. I believe that the government of Oman should take steps to do something for this situation of inflation because if inflation rises quickly its going to be worse for Oman as then it can be difficult for companies to manage production, inventory, and distribution of goods they provide. In addition, to fight inflation from a macroeconomic level is to raise interest rates which will increase the cost of capital for businesses that are dependent on outside financing to grow. So lets hope for the best for Oman and the people living there as they are the one who have to face the consequences of inflation the most.