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Daily Economic Update
21.10.2025
Saudi Arabia: Real estate price rises slow in Q3 on a first decline in residential prices in 18 months. According to official quarterly data released by GASTAT, real estate prices rose by a series low of 1.3% y/y (0% q/q) in Q3 2025 from 3.1% in Q2, marking the second consecutive quarter of decelerating price growth. The overall price index was weighed down by the first drop -1% y/y (-0.4% q/q) in residential prices since Q1 24, likely affected by ongoing government efforts to increase housing supply and relatively high valuations. In addition, the authorities’ decision last month to impose a five-year freeze on housing rents in Riyadh may curb speculative demand and lead to continued price softening over the current quarter (Q4). Meanwhile, price rises in the commercial sector eased but remained strong at 6.7% y/y (11.7% in Q2), in line with the multi-year average underpinned by good business and retail growth. Of note is the softer price pressure across most of the major provinces, with rises easing in Riyadh (1% from 3.6%) and Makkah (1.9% from 3.9%), and an accelerated decline in Medina (-8% from -3.2%), indicating that the sentiment is market-wide rather than area specific. It remains to be seen whether the residential sector trend will be sustained through 2026, given supportive underlying factors such as continued undersupply in Riyadh, ongoing housing support schemes, lower expected interest rates, and the positive non-oil growth and employment outlook.
Oman: Inflation reaches 13-month high of 1.1% in September. Inflation in Oman accelerated to 1.1% y/y (+0.6% m/m) in September, more than doubling from August’s rate of 0.5% y/y, according to Oman’s National Center for Statistics and Information. The jump in inflation to its highest in thirteen months was largely driven by significant price rises in the transportation (+4.5% y/y from 2.7% in August) and miscellaneous goods & services categories (+7.6% from 6% in August), while prices in the food & non-alcoholic beverages segment, the second largest component by weight (21%) in the CPI basket after housing & utilities, continued to decline (-0.5% y/y), albeit at a slower rate than in the previous month. Inflation in the housing & utilities category, meanwhile, was flat in annual terms, but significant in month-on-month terms, jumping 1.4% from August, a similar pattern seen in previous years. Overall, though, inflation remains low-to-moderate in Oman, supported by government price controls and subsidies. We expect inflation to average 1.1% this year, similar to forecasts by the IMF (0.9%) and other reporting agencies.
Egypt: A Reuters poll predicts the Egyptian pound will depreciate in FY25/26 despite higher growth and lower inflation. According to a Reuters poll, the Egyptian pound (EGP) is expected to depreciate to EGP49.85/USD by the end of the current fiscal year (June 2026), compared to EGP47.5/USD currently. The poll predicts that the EGP would continue depreciating beyond that to EGP52/USD by June 2027 and to EGP54/USD by June 2028. The poll, which included the opinions of 16 economists from October 6 to 20, forecast the Egyptian economy to grow by 4.6% in FY25/26, and then 4.9% and 5.3% in FY26/27 and FY27/28, respectively. The expected growth is supported by the easing interest rate environment amid the deceleration in inflation, as well as increasing exports due to the expected depreciation of the local currency. Also, the poll revealed expectations that the average inflation rate will decelerate to 12.3% in FY25/26, then to 10.2% in FY26/27, and 7.5% in FY27/28. Survey respondents expected the Central Bank of Egypt to gradually reduce interest rates, with lending rates falling from 22% currently to 16% by June 2026, then to 13% by June 2027, and 11.25% by June 2028.
