MUSCAT, (Pakistan Point News - 13th Jul, 2026) Inflation across the Gulf Cooperation Council (GCC) countries remained below 2 percent for a second consecutive year in 2025, with the annual rate edging up to 1.8 percent from 1.6 percent in 2024, according to a report by the Statistical Centre for the Cooperation Council for the Arab Countries of the Gulf (GCC-Stat).
The report said that this reflects the effectiveness of economic policies in containing inflationary pressures and maintaining price stability.
The report highlighted that the GCC inflation rate remains among the lowest globally. At 1.8 percent, GCC inflation remained below the global average of 4.2 percent, emerging market and developing economies at 5.3 percent, Japan at 3.2 percent, the United States at 2.6 percent, the European Union and advanced economies at 2.5 percent, and the euro area at 2.1 percent.
Housing and miscellaneous goods and services were the main drivers of inflation, accounting for about 73 percent of the overall increase in consumer prices.
At the level of the main Consumer Price Index divisions, miscellaneous goods and services recorded the highest inflation rate 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 and household equipment recorded no annual change, while transport prices fell 0.2 percent.
The report showed GCC inflation rose from 1.5 percent in 2020 to 2.4 percent in 2021, peaked at 3.2 percent in 2022, before easing to 2.3 percent in 2023 and 1.6 percent in 2024, then edging up to 1.8 percent 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 percent, 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, the Republic of Korea at 2.1 percent, Italy at 1.5 percent, France at 0.9 percent, while China recorded no inflation.
The report further noted that the 2.1 percent decline in global food and beverage prices helped ease imported inflationary pressures. However, the 15.2 percent increase in natural gas prices, together with ongoing geopolitical tensions, continues to pose risks that warrant close monitoring.
In conclusion, the report emphasised that the close convergence of inflation rates across the GCC countries, together with their stability below 2 percent, provides a favourable environment for advancing Gulf economic and monetary integration. It also offers 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.
