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15 April 2024

Oman raises state pension payments by up to 35%

By Agencies


Oman's ruler, Sultan Qaboos bin Said, ordered the government to give state pensioners a payments increase of between 5 per cent and 35 per cent as the country looks to offset the effect of inflation at a 16-year high.

The raise goes into effect this month, Sultan Qaboos said in a decree on Tuesday, according to state-owned Oman News Agency (ONA).

"The increment will help pensioners meet the needs of their families," ONA said.

The Public Authority for Social Insurance, which covers payments to pensioners who worked for private companies, is looking at raising its payments, the agency said, without giving more details. Fewer than 4,600 people are registered with the agency, it said.

Inflation in Oman, which pegs its currency to the dollar, accelerated for a seventh month in December to 8.29 per cent, its highest since at least 1991, as the weaker rial drove up food costs and rents rose more quickly.

In February, Oman ordered an increase of up to 43 per cent in state workers' wages and a wheat price subsidy.

The Gulf state could also lower its cap on rental increases -- now at 15 per cent over two years -- to help control housing costs, Khalil bin Abdullah Al Khonji, a member of the government's rent committee, said this month.

Oman, like most of its neighbours in the world's biggest oil-exporting region, is constrained in its fight against inflation by its peg to the dollar, which forces it to track US rate cuts.

The Federal Reserve is slashing rates to ward off recession while Gulf economies are surging on a five-fold rise in oil prices since 2002.

Oman has ruled out revaluing its currency or dropping its dollar peg any time soon because the weaker rial helps attract foreign investment and encourage exports, its central bank chief said in February. (Reuters)