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Tue 8 Sep 2009 02:02 PM

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Oman inflation slows to 1.82% - Ministry

The sultanate's inflation rate falls for the eighth month in a row, driven by a decline in food prices.

Annual inflation in Oman slowed for the eighth month in a row to 1.82 percent in July from 2.88 percent in June, the Ministry of National Economy said on Tuesday, led by a decline in food prices.

The Omani consumer price index (CPI) stood at 128.8 points in July from 128.7 points in June, government data showed.

The food, beverage and tobacco index - which accounts for 30.4 percent of the index - slipped to 149.4 points in July from 149.6 points in the previous month.

The rent component of the index, weighted at 15.3 percent of overall CPI, edged up to 139.2 points in July from 138.8 points in June, government data showed.

The annual inflation rate in Oman, which pegs its currency to the U.S. dollar, peaked at almost 14 percent last year but has steadily retreated as oil prices fell from record peaks in July 2008. Oil prices have rebounded to around $70 a barrel now from $32 in December.

"[Inflation is] coming back to normal average levels ... now that we are seeing industrial, consumer and retail demand picking up, money supply starting to grow again, which all lead to a stability in inflation levels," said Joice Mathew, head of research at United Securities in Muscat.

Growth in Oman money supply measured as M2 rose to 12.6 percent in July, its first increase in nine months, official data showed this week. (Reuters)