Professor Ali Gamal Abdelgawad: Inflation in Egypt, the UAE, and Saudi Arabia in 2025: Relative Slowdown and Price Stability

التضخم

Professor Ali Gamal Abdelgawad: Inflation in Egypt, the UAE, and Saudi Arabia in 2025: Relative Slowdown and Price Stability

Prepared by: Professor Ali Gamal Abdel Gawad – Lecturer of Investment and Finance

Markets in Egypt, the UAE, and Saudi Arabia experienced varying levels of inflation in 2025, with general indications of slowing price pressures and relative stability in some key sectors.

In Egypt, the Central Bank of Egypt announced that core inflation fell to 11.8% in December 2025, compared to 12.5% in November, while the annual urban inflation rate remained stable at 12.3%. Food and beverage prices declined by 0.7% month-on-month, and the overall Consumer Price Index (CPI) showed a slight increase to 264.2 points. This slowdown is attributed to stable food prices and improved employment levels among Saudis, as the government continues to monitor market prices and support purchasing power.

In the UAE, the annual inflation rate fell to 0.7% in August 2025, compared to 1.2% in July, driven by a 5.1% decrease in transportation costs and a 3.3% decrease in clothing and footwear prices. The cost of living index rose to 109.6 points, with consumer prices remaining relatively stable. This data reflects the UAE's ability to contain inflation despite slight increases in housing, restaurant, and financial services prices.

In Saudi Arabia, the domestic inflation rate recorded a modest annual increase of 2.2% in the third quarter of 2025. The insurance and financial services sector saw the largest increase at 8.1%, while the transportation and food and beverage sectors experienced slight increases of 1.2% and 1.1%, respectively. The Saudi Central Bank's reduction of the repo rates by 25 basis points supported monetary stability, and the inflation rate is expected to remain stable during the fourth quarter of the year.

Overall, the data in the three countries reflects a relative balance between some domestic price pressures and the effectiveness of monetary and regulatory policies, which contributes to maintaining stable consumer purchasing power, despite the differences in annual inflation levels between Egypt, the UAE, and Saudi Arabia.