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Abu Dhabi’s consumer price index soared 1.5% in October, the highest increase since February 2023, following September’s slight 0.2% uptick, according to data (pdf) from the Abu Dhabi Statistics Center. On a monthly basis, inflation rose 0.7%, after inching up 0.5% in September, separate data (pdf) shows.
Prices of ins. and financial services led annual increases in October, climbing 6.6% and mirroring rises in September. This was followed by a 5% uptick in costs across the household equipment and routine household maintenance segment, while housing, water, electricity, gas, and other fuels — the largest component in the index — rose 3.2%. Personal care, social protection, and miscellaneous goods went up 2.6%, while transport prices, the second-largest component, jumped 2.4% — its first increase since June 2024. Restaurants and hotels climbed a notable 2.3%, while tobacco prices (+0.9%), communication (+0.6%), and food and beverage prices (+0.4%) also edged up.
A few sectors are still in deflation territory on a y-o-y basis, including clothing and footwear, which recorded the most significant dip for the fourth consecutive month (-9.2%), and recreation and culture, down 1.5%.
On a monthly basis, recreation and culture recorded the highest increase among all categories, rising 3.5%, followed by a 1.1% increase for both restaurants and hotels and transport. Personal care, social protection, and miscellaneous goods and household equipment and routine household maintenance both recorded a 0.9% m-o-m increase. Food and beverages saw a slight 0.1% m-o-m rise, while clothing and footwear was the only category in m-o-m deflation.
Abu Dhabi inflation is still much cooler than in Dubai, where annual inflation accelerated to 3.36% in October, up from 2.88% in September.
The bigger picture: Back in September, the Central Bank of the UAE lowered its inflation forecast for the UAE this year by 0.4 percentage points to 1.5%, which it attributed to falling food and transport costs. This is broadly in line with the IMF’s revised inflation forecast of 1.6% in 2025 — a significant downgrade from the fund’s earlier estimate of 2.1%.
