After three years of soaring prices, the world economy is finally entering a calmer phase. Inflation is cooling, interest rates are stabilizing, and supply chains have largely recovered. Yet, despite these positive indicators, global confidence remains weak  and that paradox now defines the post-inflation era.

 Global Stability, Lingering Anxiety

In 2023, inflation peaked in major economies at record highs: over 9% in the U.S., 10% in Europe, and above 6% in parts of Asia. Central banks reacted with aggressive rate hikes, tightening credit and slowing growth.

By late 2025, the tide has turned. The IMF projects global inflation to drop below 4%, signaling a return to price stability. Energy costs are down, logistics have normalized, and consumer goods are flowing again.

Yet consumers remain wary.

“Households don’t instantly trust stability after years of volatility,” says Dr. Marcus Ellison, senior economist at Global Insight Analytics. “Inflation might fade, but the fear of another shock lingers.”

Surveys in the U.S. and Europe show that even with cooling prices, over 60% of consumers still feel financially insecure  proof that confidence is emotional, not just statistical.

 Business Confidence: The Uneven Recovery

Businesses worldwide are also hesitant to expand. Although costs have normalized, many firms face high borrowing rates and soft demand. Investment in non-essential sectors has slowed, and corporate leaders are focusing on efficiency rather than growth.

Technology, automation, and AI are helping to stabilize margins, but they also fuel job uncertainty, one reason confidence hasn’t returned even as data improves.

GCC Resilience: Low Inflation, Cautious Optimism

Across the Gulf Cooperation Council (GCC)  including Saudi Arabia, the UAE, Qatar, Kuwait, Bahrain, and Oman  inflation remains among the lowest globally.

According to GCC-Stat, average inflation in 2024 stood at just 1.7%, down from 2.2% in 2023, supported by energy-driven fiscal stability and subsidy mechanisms.

The IMF expects Gulf inflation to stay below 2% in 2025, with steady growth driven by diversification programs like Saudi Vision 2030, UAE’s digital transition, and Qatar’s Vision 2030.

Still, confidence hasn’t fully rebounded.

• A PwC regional survey found nearly half of Gulf consumers still worry about rising prices.
• Many small and medium enterprises (SMEs) report delayed expansion plans due to higher lending costs.
• And although 90% of GCC CEOs expect revenue growth in 2025, hiring remains conservative.

“We’ve won the inflation battle, but not the trust battle,” says Laila Haddad, Gulf economic strategist. “Consumers remember the shocks. Confidence takes longer to rebuild than prices take to cool.”

Looking Ahead: The Confidence Rebuild

Global markets now face a different challenge: not how to control inflation, but how to restore trust.
For the Gulf, that means strengthening non-oil diversification, supporting SMEs, and stimulating consumer spending through stable credit policies.

As global inflation fades, the GCC could emerge as one of the most stable economic zones, attracting investors seeking predictable returns and controlled price environments.

Inflation’s story isn’t over, it’s evolving. The numbers say stability is back, but sentiment says otherwise. From New York to Riyadh and Doha, the next phase of the global economy won’t be measured by prices  but by confidence.

This article is brought to you incooperation with AJMN, Auditment & 8Dor