GCC inflation stability continued through the second quarter, even as geopolitical tensions impacted global markets. Gulf nations maintained low inflation while navigating oil price swings and tariff challenges.
A new report revealed that Dubai’s inflation rate remained steady at 2.4 percent in June. Saudi Arabia and Kuwait both recorded 2.3 percent inflation for the same month. These figures reflect consistent price control across key Gulf markets.
Moreover, regional inflation trends align with earlier data from the GCC Statistical Center. It showed that the GCC’s average inflation dropped to 1.7 percent, down from 2.2 percent the year before. This improvement reflects the region’s ongoing macroeconomic discipline.
According to economists, GCC inflation stability will support the projected 4.4 percent economic growth expected in the Gulf next year. Higher oil production and strong non-oil sector activity both contribute to this optimistic forecast.
Despite conflict in the Middle East, crude oil prices only rose briefly before falling again. Prices climbed to $79 per barrel but dropped later as OPEC+ increased production. Brent crude settled at $68.4 per barrel, showing an 8.3 percent decline from last year.
Kamco Invest explained that global trade tensions and new tariffs have also affected markets. However, gradual changes in commodity and shipping costs helped prevent sudden inflation spikes in the Gulf.
The firm emphasized that GCC inflation stability also comes from sound regional policies. Authorities across the Gulf applied cautious financial strategies that kept inflation lower than global averages. This resilience sets the region apart from inflation trends in the U.S. and Europe.
Meanwhile, inflation in the U.S. rose to 2.7 percent, driven by new tariffs and rising core goods prices. The Eurozone also saw an increase, with services and food prices contributing the most to annual gains.
In contrast, Gulf countries showed strong investor confidence. Foreign investors boosted exposure to regional stocks, bringing net inflows to $4.2 billion in the second quarter. Cumulative inflows reached $7 billion for the first half of the year.
This steady investment flow reflects confidence in GCC inflation stability and overall market potential. Experts believe this trend will continue if Gulf countries maintain disciplined policy and keep inflation under control.
