Kamco Invest reported that inflation across the Middle East and North Africa (MENA) continued its downward trend through 2025, supported by lower energy prices and tighter fiscal policies.

Citing the International Monetary Fund’s (IMF) latest Regional Economic Outlook, the Kamco Invest report noted that inflation in most MENA economies is easing as the effects of previous price surges subside. In contrast, inflationary pressures in major advanced economies remain persistent, raising global borrowing costs and influencing monetary policies worldwide.

According to the IMF, inflation in Gulf Cooperation Council (GCC) countries is expected to remain largely stable at or slightly below the 2% target throughout 2025 and 2026. For oil-importing nations such as Jordan, Morocco, and Egypt, inflation is forecast to continue falling as the impacts of past currency depreciations and energy price spikes diminish, reports Al-Rai daily.

Specifically, inflation in the Gulf is projected to increase modestly from 0.6% in 2024 to 1.7% in 2025, before stabilizing at around 2% in 2026.

Despite global uncertainties, including rising tariffs and supply chain disruptions, inflation in Gulf economies has stayed relatively steady, thanks to prudent monetary management and subdued energy costs.

Kamco Invest attributed part of this stability to the recent increase in oil production by OPEC and its allies, which raised output by nearly 3 million barrels per day between April and August 2025. This rise in supply has helped keep energy prices in check, thereby easing inflationary pressures both regionally and globally.

In Saudi Arabia, inflation rose by 2.2% year-on-year in September 2025, driven mainly by higher housing, utilities, and personal goods costs.

Meanwhile, the UAE’s inflation rate in Dubai reached 2.9% during the same month, largely due to increases in housing and recreation costs, while transportation prices continued to decline. The IMF expects inflation in the UAE to average around 1.6% in 2025, maintaining overall price stability.

Elsewhere in the Gulf, inflation remained subdued. Bahrain’s Consumer Price Index (CPI) was stable at 101.7 points in September, while Oman recorded a modest 1.1% annual rise.

Qatar saw its CPI increase by 1.1%, supported by price gains in food, recreation, and education. According to Kamco Invest, such moderate inflation reflects the region’s economic resilience and the effectiveness of policy coordination among GCC members.

Although inflationary pressures persist in advanced economies—particularly the United States, where inflation rose to 3% in September—MENA countries appear well-positioned to maintain stability.

Kamco Invest concluded that steady oil output, moderate food prices, and disciplined fiscal management will continue to support low inflation levels across the Gulf, even amid ongoing global volatility.