Qatar is expected to see the lowest inflation among the Gulf Cooperation Council (GCC) countries and the wider Arab region this year with its consumer-price index (CPI) based inflation expected to average to 1.4% against 1.9% in the GCC and as high as 8.5% in the wider Arab world, according to Kamco Invest, a regional economic thinktank.
Inflation in Bahrain is expected to average to 1.8% in 2025, Kuwait (2.4%), Oman (1.5%), Saudi Arabia (1.9%) and the UAE (2.1%), Kamco said in its latest report.
In 2024 too, the same trend was seen with Qatar’s inflation projected at 1% compared to 1.4% in Bahrain, 3% in Kuwait, 1.3% in Oman, 1.7% in Saudi Arabia and 2.3% in the UAE. Overall, inflation was estimated to have risen by 1.8% in the GCC and a high of 11.9% in the Arab world.
In the latest Article IV consultation report, the International Monetary Fund has forecasted Qatar’s inflation would converge to around 2% over the medium term compared to 1% in 2024.
Inflation in the GCC countries continued to be subdued during 2024 against most other regions in the world where elevated prices and high inflation persisted despite a falling trajectory. Moreover, inflation in the wider Middle East and North Africa (Mena) region remained higher than that of the GCC region during 2024.
According to the World Bank, inflation in the GCC region came in at 2.1% in 2024, kept down by subsidies, fuel price cap, and currency pegs. However, in certain sectors such as the housing sector, inflationary pressures remained in several of the six GCC nations.
Qatar’s inflation was up 0.2% year-on-year (y-o-y) in December 2024, recording its second-lowest average yearly inflation rate growth in four years, according to Kamco report.
Qatar’s moderate inflation rise came after four out of the eleven sub-indices recorded declines in December-2024, dragging down what could have been a greater inflation rate uptick in December2024.
The food and beverages group, one of the largest weighted groups in Qatar’s CPI Index, witnessed a 2.2% y-o-y decline in December-2024, while the housing, water, electricity, and gas index, another majorly weighted sub-index of the general CPI, declined by 4.2% y-o-y in December 2024.
The marginal yearly inflation uptick during the year was mainly driven by a moderate rise in prices in the communication group, which saw an increase of 4.4% y-o-y in December2024, followed by the recreation and culture and restaurants and hotels groups, with y-o-y increases of 2.5% and 1.7%, respectively.
In terms of monthly performance, Qatar’s CPI increased by 0.87% in December-2024 over the previous month. The monthly inflation rate in Qatar averaged 0.09% during the period between 2009 and 2024, reaching an all-time high of 1.59% in December-2023 and a record low of -2.6% in January-2022.
The moderate monthly inflation uptick was mainly due to the 8.8% month-on-month jump in the prices of the recreation and culture index, followed by the 1.5% m-o-m moderate gain in the restaurants and hotels index.
