Saudi Arabia managing Iran war-sparked inflation shock as GCC price pressures diverge
RIYADH: Saudi Arabia has so far contained the inflationary fallout from the Middle East war better than many regional peers, with consumer price growth staying below 2 percent even as global inflation pressures returned through higher energy, food and transport costs.
The Kingdom’s Consumer Price Index rose 1.7 percent year on year in April, according to Kamco Invest’s May 2026 Gulf Cooperation Council inflation update, keeping Saudi inflation “slightly below the 2 percent mark” during the first several months of the year.
The relative stability stands out as the same report said the war has reversed part of the global disinflation trend seen over the past two years, with the International Monetary Fund revising global headline inflation up to 4.4 percent in 2026 before an expected decline to 3.7 percent in 2027.
The inflation risks highlighted by Kamco Invest are also reflected in the World Bank’s latest Commodity Markets Outlook, which said the Middle East war is set to trigger the sharpest energy price surge in four years.
