Inflation across the Gulf 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).

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%, GCC inflation remained below the global average of 4.2%, emerging market and developing economies at 5.3%, Japan at 3.2%, the US at 2.6%, the European Union and advanced economies at 2.5%, and the euro area at 2.1%, stated the report.

Housing and miscellaneous goods and services were the main drivers of inflation, accounting for about 73% of the overall increase in consumer prices, it added.

GCC-Stat said at the level of the main Consumer Price Index divisions, miscellaneous goods and services recorded the highest inflation rate at 5.4%, followed by housing at 4%, recreation and culture at 2%, restaurants and hotels at 1.6%, food and beverages at 1.2%, education at 1%, 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%.

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%, followed by the United Kingdom at 3.9%, Japan at 3.2%, India at 2.8%, the US at 2.6%, Germany at 2.2%, the Republic of Korea at 2.1%, Italy at 1.5%, France at 0.9%, while China recorded no inflation.