Saudi Arabia: Gulf Cooperation Council inflation rates remained stable throughout the second quarter of 2025 despite heightened geopolitical instability, a new report showed.

According to the latest analysis by Kuwait-based non-banking firm Kamco Invest, Dubai recorded a monthly inflation rate of 2.4 percent in June, unchanged from May, followed by Saudi Arabia and Kuwait, both registering inflation rates of 2.3 percent in June.

This aligns with recently released data from the Statistical Center for the GCC, which shows that the region’s average inflation rate fell to 1.7 percent in 2024, down from 2.2 percent in 2023.

It also supports the fact that the GCC economies are expected to grow 4.4 percent in 2025, up from an earlier forecast of 4 percent, as rising oil output and resilient non-oil sector activity offset global trade headwinds, according to a recent economic update by the Institute of Chartered Accountants in England and Wales prepared with Oxford Economics.

“The war in the Middle East affected crude oil prices that surged to almost $79 per barrel. But quietly receded in the subsequent weeks as OPEC+ accelerated the output hikes aiming to unwind the full 2.2 mb/d by September-2025,” Kamco said.

It added: “Brent crude oil is trading at $68.4 per barrel, 8.3 percent lower than its level at the end of 2024. The quarter also witnessed the start of the global tariff war that affected financial markets and expectations for future economic growth.”

The Kamco report also said that the conflict’s limited impact on regional inflation was largely because increases in commodity and shipping costs occurred gradually over time, rather than through sudden spikes.

The ongoing application of prudent economic policies across the GCC has also played a key role in controlling inflation, keeping rates well below those in other parts of the Middle East and the world.

Inflationary pressures in the US intensified in June, with the annual rate climbing to 2.7 percent, the highest in five months, up from 2.4 percent in May. The uptick was primarily attributed to rising prices in core goods, which hit their highest level in two years.

“These increases are largely attributed to new tariffs affecting household furnishings, appliances, electronics, apparel, and toys. Meanwhile, the US consumer price index registered a m-o-m (month-on-month) growth of 0.3 percent in June-2025. Excluding the typically volatile food and energy sectors, US core inflation increased by 0.2 percent m-o-m, with the annualized core rate rising to 2.9 percent in June,” Kamco said.

“It is important to highlight that prior to this uptick, US inflation had been on a generally downward trajectory. Similarly, inflation in the Eurozone rose in June-2025, reaching 2.0 percent, down from 2.5 percent in June-2024 but slightly higher than May-2025’s rate of 1.9 percent. The Services sector experienced the highest y-o-y growth at 3.3 percent, followed by the Food, Alcohol, and Tobacco category, which rose by 3.1 percent,” it added.

Earlier in July, Kamco Invest said that foreign investors sharply increased their exposure to Gulf stock markets in the second quarter of 2025, with net inflows surging 50 percent compared to the previous three months to reach $4.2 billion.

The momentum extended the streak of net foreign inflows into GCC equities to six consecutive quarters, with total net purchases in the first half of 2025 rising 39.8 percent year on year to $7 billion.