GCC Inflation Holds Steady at 1.8% in 2025, Among Lowest Globally

MUSCAT, SEPT 6
Inflation across the GCC states remained stable at 1.8 per cent in 2025, marking the second consecutive year below the 2 per cent threshold, according to a report by the GCC Statistical Centre (GCC-Stat). The figure compares with 1.6 per cent in 2024 and reflects the effectiveness of regional economic policies in containing price pressures.
The GCC's inflation rate is among the world's lowest, trailing the emerging and developing economies' average of 5.3 per cent, the global average of 4.2 per cent, Japan's 3.2 per cent, the United States' 2.6 per cent and the eurozone's 2.1 per cent.
Housing and miscellaneous goods and services were the main drivers of Gulf inflation, together accounting for about 73 per cent of the total increase.
Among the main consumer price index groups, miscellaneous goods and services posted the highest inflation at 5.4 per cent, followed by housing at 4 per cent, culture and recreation at 2 per cent, restaurants and hotels at 1.6 per cent, food and beverages at 1.2 per cent, education at 1 per cent and tobacco at 0.6 per cent. Clothing and footwear rose 0.4 per cent, while health, communications and furniture were unchanged. Transport prices fell -0.2 per cent.
The report traced the trajectory of GCC inflation from 2020 to 2025, showing a rise from 1.5 per cent in 2020 to 2.4 per cent in 2021, before peaking at 3.2 per cent in 2022. It then moderated to 2.3 per cent in 2023 and 1.6 per cent in 2024, before edging up slightly to 1.8 per cent in 2025 — a trend that underscores relative stability against the backdrop of global economic fluctuations.
Among key trading partners, Brazil recorded the highest inflation at 5 per cent, followed by the UK at 3.9 per cent, Japan at 3.2 per cent, India at 2.8 per cent, the US at 2.6 per cent, Germany at 2.2 per cent, South Korea at 2.1 per cent, Italy at 1.5 per cent and France at 0.9 per cent. China posted the lowest at zero per cent.
A 2.1 per cent global drop in food and beverage prices helped ease imported inflation, though a 15.2 per cent rise in natural gas prices and ongoing geopolitical tensions remain risks to monitor.
The report concluded that the convergence of inflation rates across the GCC and their sustained stability below 2 per cent provide a strong foundation for deeper economic and monetary integration, while giving member states fiscal space for reforms and development spending. It also called for harmonising statistical methodologies and enhancing policy readiness for future external shocks. — ONA