GCC states’ inflation is predicted at 2.1% in 2021 due to higher costs of raw materials

Consumer prices in the Gulf Cooperation Council states are projected to have risen by 2.1 percent in 2021, compared to 1.2 percent in 2020, a report by the GCC Statistical Center revealed.  

Looking forward, inflation rate forecasts for 2022 and 2023 are predicted at 1.8 percent and 2.6 percent, respectively.

Inflationary pressures will come from jumps in costs of imported raw materials and consumables, the report explained. Also, consumer prices will rise as a result of higher consumption and public expenditure following improvements in employment rates and household income.

All Gulf countries are forecasted to have inflation rates in the range of 1-3 percent in 2022, with Qatar hitting the highest rate.

Last year, all GCC states experienced deflation – a drop in consumer prices – except for Saudi Arabia and Kuwait, which reach inflation rates of 3.4 percent and 2.1 percent. The latter two pushed the region’s overall inflation rate to 1.2 percent in 2020.