Gulf inflation stabilizes at 1.8 percent in 2025
A report on inflation rates for 2025 issued by the Gulf Cooperation Council (GCC) Statistical Center indicated continued relative stability in price levels within the GCC member states, amid an economic environment characterized by ongoing global fluctuations and varying pressures on supply chains and energy markets.
According to the report’s data, the GCC inflation rate remained stable at 1.8 percent, staying below the 2 percent threshold for the second consecutive year, reflecting the effectiveness of economic and monetary policies in containing price pressures and enhancing macroeconomic stability.
In terms of international comparison, the GCC demonstrated advanced performance in controlling inflation, compared to 5.3 percent in emerging and developing economies, 2.5 percent in the European Union, 2.6 percent in the United States, and 3.2 percent in Japan. This makes the inflation rate in the GCC member states less than half the global average and lower than that of most major trading partners.
The data shows that the inflation trajectory in the GCC member states during the 2020–2025 period was marked by moderate fluctuations, rising from 1.5 percent in 2020 to a peak of 3.2 percent in 2022, before gradually declining to 2.3 percent in 2023 and approximately 1.6 percent in 2024, then returning to 1.8 percent in 2025.
Regarding components, the report highlighted that inflationary pressures were concentrated in the group of diverse goods and services at 5.4 percent and the housing group at 4 percent, followed by culture and recreation at 2 percent, restaurants and hotels at 1.6 percent, food and beverages at 1.2 percent, and education at 1.0 percent. Meanwhile, the groups for clothing and footwear, tobacco, health, and communications recorded low levels, with the transport group showing a decline of 0.2 percent.
The report added that GCC inflation contribution is primarily concentrated in Saudi Arabia at 72.4 percent, followed by the United Arab Emirates at 12.1 percent, and Kuwait at 11.2 percent, with the remaining percentages distributed among Oman, Qatar, and Bahrain. This reflects the relative weight of major Gulf economies in shaping the overall index.
In terms of economic groups, housing accounted for 48.9 percent of the contribution to GCC inflation, followed by goods and services at 24.3 percent, and food and beverages at 14.1 percent, with the remaining percentages distributed among other sectors. This indicates that inflationary pressures are primarily of an internal structural nature.
Regarding external factors, a global decrease in food and beverage prices of 2.1 percent helped alleviate inflationary pressures, while a 15.2 percent rise in natural gas prices, alongside geopolitical tensions, constituted additional pressure on prices, underscoring the continued need to monitor global developments.
Regarding Kuwait, the data indicates an inflationary trajectory characterized by an increase followed by a decline during the 2020–2025 period. The rate rose from 2.1 percent in 2020 to 4 percent in 2022, before gradually declining to 2.4 percent in 2025, reflecting a gradual return to price stability.
