Inflation across the Gulf Cooperation Council (GCC) countries remained below 2% for a second consecutive year in 2025, with the annual rate edging up to 1.8% from 1.6% in 2024, according to a report by the Statistical Centre for the Cooperation Council for the Arab Countries of the Gulf (GCC-Stat).
Terming the ratio as a reflection of the effectiveness of GCC member countries’ economic policies in containing inflationary pressures and maintaining price stability, GCC-Stat also highlighted the region’s inflation rate remaining among the lowest globally.
At 1.8%, GCC inflation remained below the global average of 4.2%, emerging market and developing economies at 5.3%, Japan at 3.2%, the United States at 2.6%, the European Union (EU) and advanced economies at 2.5%, and the euro area at 2.1%.
“Housing and miscellaneous goods and services were the main drivers of inflation, accounting for about 73% of the overall increase in consumer prices,” GCC-Stat stated further.
At the level of the main “Consumer Price Index Divisions”, GCC-Stat found miscellaneous goods and services recording the highest inflation rate at 5.4%, followed by housing at 4.0%, recreation and culture at 2.0%, restaurants and hotels at 1.6%, food and beverages at 1.2%, education at 1.0%, tobacco at 0.6%, and clothing and footwear at 0.4%.
“Health, communication, and furnishings and household equipment recorded no annual change, while transport prices fell 0.2%,” GCC-Stat remarked.
GCC inflation, as per the agency, rose from 1.5% in 2020 to 2.4% in 2021. In 2022, the ratio peaked at 3.2%, before easing to 2.3% and 1.6% in 2023 and 2024, respectively, then edging up to 1.8% in 2025, reflecting relative stability compared with global inflation developments.
Among the GCC’s major trading partners, Brazil recorded the highest inflation rate at 5.0%, followed by the United Kingdom (3.9%), Japan (3.2%), India (2.8%), the United States (2.6%), Germany (2.2%), the Republic of Korea (2.1%), Italy (1.5%) and France (0.9%).
“The 2.1% decline in global food and beverage prices helped ease imported inflationary pressures. However, the 15.2% increase in natural gas prices, together with ongoing geopolitical tensions, continues to pose risks that warrant close monitoring,” GCC-Stat said.
While concluding things, GCC-Stat emphasised that the close convergence of inflation rates across the GCC countries, together with their stability below 2%, will provide a favourable environment for advancing Gulf economic and monetary integration.
“The development will also offer fiscal space for member states to continue implementing economic reforms and development spending, while underscoring the importance of harmonising statistical methodologies and strengthening policy preparedness to address potential future external shocks,” the agency concluded.