Dubai inflation accelerates at its fastest pace in almost a year in October

Dubai’s annual inflation accelerated further in October to 3.36%, up from 2.88% in September, driven mainly by an uptick in transport costs for the first time in 2025, according to the Dubai Statistics Center data (pdf). This reading marks the fastest pace of acceleration since August 2024, Emirates NBD said in a research note (pdf).

Transport price inflation jumped 4.16% for the first time this year, pushed by higher petrol prices, which rose 4.1% y-o-y in October, according to Emirates NBD.

REMEMBER – The Fuel Price Committee had hiked petrol prices in October, before lowering them by up to 5.6% this month.

Lower fuel prices in November mean this is likely temporary: Emirates NBD anticipates transport to “turn deflationary once again given that a liter of super 98 currently costs AED 2.63, down 4% y-o-y, while with global oil benchmarks trending lower, downwards pressure on transport prices will likely be maintained into 2026.”

The housing, water, electricity, gas, and other fuels segment — the largest component of the basket — continued to pressure prices, though at a slower pace than in September. It softened to 5.3% y-o-y compared to 5.8% a month earlier. This was the lowest since April 2023, and follows on from a gradual slowdown that started earlier this year. “We expect that this moderation in housing cost pressures will continue through the coming months, given base effects and an anticipated ramp-up in supply,” Emirates NBD said.

Other categories seeing inflation: The uptick was also pushed by a 6.7% y-o-y increase in prices in the recreation, sport, and culture segment, while tobacco also posted one of the sharpest gains, rising 3.66% y-o-y but holding steady on a m-o-m basis for the third consecutive month. Meanwhile, information and communication was the only segment witnessing a decline of 0.05% for the third month in a row.
On a monthly basis, consumer prices edged up 0.64% in October, up from 0.44% in September, according to the statistics center’s monthly inflation report (pdf). This was pushed by an increase of 4.26% in prices in restaurant and accommodation services, followed by a 2.1% surge in transport, while housing, water, electricity, gas and other fuels saw a 0.42% rise during the month.

Looking ahead: Emirates NBD maintained its forecast for 2.6% average headline inflation through year-end, citing their “expectation that price growth will soften once more through the end of the year.” The bank sees CPI inflation averaging 2.5% in 2026.