Today's Edition
A.SREENIVASA REDDY (ABU DHABI)
The GCC continues to perform favourably on the inflation front, with price levels staying well below the regional average, according the latest inflation update from the Kamco Invest.
“This trend is expected to persist throughout the remainder of the year, supported by moderating energy prices and expectations of a relatively stable global exchange rates after recent volatility,” the report said. Regional monetary policies and continued state subsidies in essential sectors such as energy and food also underpin the ongoing price stability, the report said.
In the UAE, Dubai’s Consumer Price Index (CPI) recorded a year-on-year (YoY) rise of 2.3% in April 2025, easing from 2.8% in March. The Housing, Water, Electricity, and Gas group—the most heavily weighted component in the CPI basket—was a key driver, posting a 7.0% increase. In contrast, the Transport group, another significant category, registered a sharp 7.6% decline YoY in April, compared to a 3.3% drop in March, helping moderate overall inflation. Healthcare costs grew by 3.0%, slightly below the previous month’s 3.1%. Despite the slight uptick, inflation in the UAE remains within manageable limits. The International Monetary Fund (IMF) projects an average inflation rate of 2.1% for the UAE in 2025, rising modestly from 1.7% in 2024.
Saudi Arabia reported an inflation rate of 2.3% in April 2025, driven mainly by a 6.8% rise in the Housing, Water, Electricity, and Other Fuels group. Apartment rents soared by 11.9% YoY, contributing to the broader housing index increase. Food and beverages prices rose moderately at 2.2%, while vegetables alone saw a notable 9.4% surge. Meanwhile, other categories such as Transport and Clothing & Footwear saw deflationary movements, which partially offset the upward pressures.
Kuwait reported an annual inflation rate of 2.3% in April, as measured by its CPI, which reached 136.3 points. The Food & Beverages group led the increase, climbing by 4.6% YoY, followed closely by Services & Miscellaneous Goods, which grew by 4.9%. However, the Transport index declined by 1.1% due to lower vehicle prices and operational costs, while Housing Services remained flat on a monthly basis. Kuwait's overall inflation trajectory remains well-anchored, aided by policy stability and commodity subsidies.
In Qatar, inflation remained significantly lower than its Gulf peers, with the CPI rising by just 0.3% YoY in March 2025. The subdued figure was supported by notable declines in key groups such as Housing, Water, Electricity, and Gas, which fell by 5.0%, and Food & Beverages, which dropped by 0.6%. On the upside, the Communication group posted a sharp 12.9% YoY increase. Month-on-month, Qatar's CPI decreased by 0.8%, reinforcing the overall picture of subdued inflationary pressure.
Bahrain recorded the lowest inflation among GCC countries, with the annual inflation rate virtually flat at 0.1% in March 2025. CPI stood at 101.3 points, and prices declined in five out of the twelve CPI categories. Housing-related costs fell by 6.7%, while Recreation & Culture and Health dropped by 7.3% and 1.9%, respectively. The IMF projects that Bahrain’s inflation will average 1.0% in 2025—the lowest across the GCC.
Oman reported an annual inflation rate of 0.5% in March 2025, down from 0.9% the previous month. The most significant price increases came from Miscellaneous Goods & Services, which rose by 6.1%, and Health, which increased by 3.2%. However, the Food & Non-Alcoholic Beverages category declined by 0.7%, with vegetables and seafood prices falling sharply. Oman continues to benefit from fiscal prudence and a rise in non-oil exports, which contribute to keeping inflationary pressures in check.
Across the board, the GCC’s inflation trajectory appears resilient despite global uncertainties. Stable currency pegs to the US dollar and proactive government intervention have played a critical role in anchoring prices.
