Inflation across the six GCC states held below 2 percent for a second consecutive year in 2025, edging up to 1.8 percent from 1.6 percent in 2024, according to the Statistical Centre for the Cooperation Council for the Arab Countries of the Gulf (GCC-Stat).
The figure sits well under the global average of 4.2 percent, and below rates recorded across emerging markets (5.3 percent), Japan (3.2 percent), the United States (2.6 percent), the European Union and advanced economies (2.5 percent), and the euro area (2.1 percent). GCC-Stat said the reading reflects the effectiveness of economic policies in containing inflationary pressures.
Housing and miscellaneous goods and services were the dominant drivers, together accounting for around 73 percent of the overall rise in consumer prices. Within the main Consumer Price Index categories, miscellaneous goods and services recorded the sharpest increase at 5.4 percent, followed by housing at 4.0 percent, recreation and culture at 2.0 percent, restaurants and hotels at 1.6 percent, food and beverages at 1.2 percent, education at 1.0 percent, tobacco at 0.6 percent, and clothing and footwear at 0.4 percent. Health, communication, and furnishings recorded no annual change, while transport prices declined 0.2 percent.
Placed in a longer arc, GCC inflation climbed from 1.5 percent in 2020 to a peak of 3.2 percent in 2022, before pulling back to 2.3 percent in 2023 and 1.6 percent in 2024, with the latest reading marking a slight uptick.
Among the GCC’s major trading partners, Brazil led at 5.0 percent inflation, followed by the United Kingdom at 3.9 percent, Japan at 3.2 percent, India at 2.8 percent, the United States at 2.6 percent, Germany at 2.2 percent, South Korea at 2.1 percent, Italy at 1.5 percent, and France at 0.9 percent, while China recorded no inflation.
Two external factors drew attention in the report. A 2.1 percent decline in global food and beverage prices helped reduce imported inflationary pressure. At the same time, a 15.2 percent rise in natural gas prices, compounded by ongoing geopolitical tensions, poses risks the report said warrant close monitoring.
GCC-Stat concluded that the convergence of inflation rates across member states, held below 2 percent, creates a favourable environment for advancing Gulf economic and monetary integration, and preserves fiscal space for governments to continue economic reform and development spending.
