Consumer prices have broadly eased in most Gulf countries, with overall inflation in the region averaging 2.6% in 2023, down from 3.3% a year prior, according to estimates by Kamco Invest.

Inflation rates in all countries across the GCC region declined in 2023, with Bahrain posting the lowest at 0.1%, down from 3.6% in 2022, followed by Oman with an inflation rate of 0.6%, down from 2.8%, said the report.

In Saudi Arabia, inflation rate was pegged at 2.3% in 2023, compared to 2.5% in 2022. Qatar’s inflation dropped to 2.9% from 5%, while in the UAE, inflation also fell to 3.3% from 4.8%.

Kamco Invest also noted that among the cities in GCC countries, only Dubai reported an increase in its average annual inflation rate, which edged up from 2.9% in 2022 to 3.3% in 2023.

Image courtesy: Kamco

Overall, consumer prices in the GCC region trended lower during 2023 when compared to other regions in the world where high prices persist.

GCC’s inflation is lower than the global headline inflation, which the OECD estimated to decline to 7% in 2023.

However, the region could face some challenges, especially since the Red Sea crisis and the Gaza conflict continue.

“There are new geopolitical challenges facing the global economy, especially the MENA economies, such as the ongoing war in Gaza and the disruption of global shipping lines in the Red Sea,” the report said.

Research firm BMI had said that the Red Sea crisis could drive up consumer prices in the Middle East, as most of the region’s imported goods (81.6%) are transported using the routes that are exposed to the disruption.

(Writing by Cleofe Maceda; editing by Seban Scaria)