DUBAI: Oman's annual inflation rate increased marginally to 3.8 percent in October, while prices rose from a month earlier mainly because of an increase in education costs, data showed on Monday.
Inflation was 3.7 percent year-on-year in September, after hitting a 29-month high of 5.3 percent in August.
On a month-on-month basis, consumer prices increased 0.2 percent in October after falling 0.3 percent in September, data from the country's economy ministry showed. Education services jumped by 11.4 percent month-on-month in October.
"Typically you have this kind of increase when the new school year starts. The increase in October is the seasonal increase that you see once a year in Oman," said Fabio Scacciavillani, chief economist at Oman Investment Fund in Muscat.
Analysts polled by Reuters in September forecast average inflation in Oman of 3.9 percent in 2011 and 2012, after 3.3 percent in 2010.
"I don't see any pressure building. The inflation trend is broadly speaking pointing downwards. With the slowdown in the global economy, it doesn't look like imported inflation will be an issue," Scacciavillani said.
Rents and energy, which account for 21.4 percent of Oman's consumer basket, rose 0.5 percent month-on-month in October after climbing 0.2 percent in the previous month.
Food prices however, which make up more than 30 percent of the basket, fell 1.2 percent on a monthly basis after a 1.3 percent increase in September.
The sultanate's economy is expected to expand 4.0 percent this year and 4.2 percent in 2012, helped by the government's increased infrastructure spending, the Reuters poll found.
The Central Bank's executive president said in November he was not worried about inflation at the moment, but that the central bank would watch it very closely. He forecast in October inflation would reach 4 percent in 2011, while the economy was likely to grow 5 percent.
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