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Daily Economic Update
29.09.2026
Kuwait: Real estate sales extend their recovery in August. The Ministry of Justice has published its latest real estate sales data labelled "July 2026", which we assume in fact corresponds to August 2026 since July data was already reported last month. In all cases, these figures should be regarded as provisional and subject to revision. Total property sales continued to increase for the third consecutive month reaching KD409 million (+3.5% m/m; -13.3% y/y) in August, the highest level since February. The increase in August was supported by a continued improvement across all categories. Residential sales rose to KD174 million (+3.3% m/m; +30% y/y), the highest level since December 2025, extending the positive momentum seen in recent months and pointing to sustained underlying demand. Meanwhile, investment sales continued to recover at a moderate pace, reaching KD139 million (+1.3% m/m; +40% y/y), the highest level since February but remained slightly below the 2025 monthly average. Commercial sales, the market’s most volatile component, also rose to KD97 million (+7.4% m/m), though were significantly below the corresponding period in 2025 (-60%). For the first eight months of 2026, property sales declined by 7.8% y/y to reach KD2.5 billion, reflecting weaker investment (-23%) and commercial (-12.7%) sales. In contrast, residential sales rose by 11.7%, as demand was supported by the price corrections seen over the past two years. August data suggest that the drag from the regional tensions has significantly dissipated, and market activity is steadily returning to pre-conflict levels after absorbing the shock. The rebound has been led by the residential segment while the recovery in the investment and commercial segments slightly more subdued.
Bahrain: Inflation steady at 3% y/y, the highest level since December 2022. Bahrain’s CPI inflation rate remained unchanged at 3% y/y in August but eased on a monthly basis to 0.2% m/m from 0.3% in July. Price pressures increased in food and non-alcoholic beverages (8.1% y/y vs. 7.1% in July), recreation and culture (10.1% vs. 8.6%), and miscellaneous goods and services (3.2% vs. 2.4%). Moreover, deflation eased in alcoholic beverages and tobacco (-0.7% y/y vs. -1.9%), housing and utilities (-1.1% vs. -1.3%), furnishings and household equipment (-1.4% vs. -1.5%), and communication (-0.2% vs. -0.5%). In contrast, inflation moderated in transport (7.8% y/y vs. 9.1%) and restaurants and hotels (1.1% vs. 1.5%). Price rises remained unchanged in education at 2.8% and health at -0.1%.
US: Fed Governor Cook sees AI investment driving up inflation and the labor market well positioned to handle an increase in rates. Fed Governor Lisa Cook highlighted that while AI-linked productivity gains would provide modest disinflation over the next few years, she didn’t expect them “to arrive in time to offset the broadening inflationary pressure later this year.” She noted “some economy-wide [inflation] pressure from AI-fueled demand,” and cited around 5% increase in electricity and water costs over the past year as an example. She expected “continued pressure on inflation from the AI buildout” and “from the pass-through of higher oil prices and supply chain disruptions associated with the conflict in the Middle East.” On the labor market, Cook mentioned that it “appears to be well positioned to handle an increase in rates”. Fed officials have recently grown more wary of higher inflation risks, and those views have pushed up market expectations for further interest rate increases over the coming months. The futures market currently indicates around 72% probability for a 25bps hike in October, while the probability for two hikes by year-end stands at around 60%.