GCC inflation holds steady at 1.8% in 2025

Inflation across the Gulf Cooperation Council (GCC) countries has remained remarkably stable, holding at 1.8% in 2025. This figure represents a slight increase from 1.6% in 2024 but remains well below the 2% threshold for the second consecutive year. The GCC Statistical Centre (GCC-Stat) report highlights this stability as a testament to the effectiveness of economic policies in managing inflationary pressures.

Compared to global trends, the GCC's inflation rate is notably low. At 1.8%, it significantly undercuts the rates seen in emerging markets (5.3%), the global average (4.2%), Japan (3.2%), the United States (2.6%), and the European Union (2.5%). The report attributes the primary drivers of GCC inflation to housing costs and miscellaneous goods and services, which together accounted for approximately 73% of the overall inflation. Miscellaneous goods and services saw the highest inflation rate at 5.4%, followed by housing at 4.0%.

While certain sectors experienced price increases, others remained stable or declined. Health, communication, and furnishings saw no annual change, and transport even registered a slight decrease of 0.2%. The report also noted that a 2.1% decline in global food and beverage prices helped mitigate imported inflation. However, rising natural gas prices and ongoing geopolitical tensions pose potential risks that require continued monitoring.

The report concludes that the convergence and stability of inflation rates across GCC nations create a favorable environment for economic and monetary integration. This stability also provides fiscal flexibility for member states to pursue economic reforms and development spending, underscoring the importance of harmonized statistical methods and preparedness for future external economic challenges.