Dubai’s annual inflation rate accelerated to 2.99% in December 2025, up from 2.73% in November, primarily driven by higher transportation and food costs, according to the latest Dubai Statistics Center data(pdf). This year-end acceleration highlights the sticky nature of Dubai’s primary inflationary engines: housing, logistics, and seasonal demand.

Consumer prices surged 0.7% on a monthly basis, completely reversing November’s brief 0.17% dip, according to the Statistics Center’s monthly inflation report (pdf).

Our take: Dubai’s inflation story at the close of 2025 is one of supply-side pressure meeting festive intensity. This can be seen by the biggest risers last month:

  • The housing, water, electricity, and gas category — which carries a massive 40.68% weight in the basket — remains the dominant driver, rising 5.1% y-o-y. While this represents a slight cooling from the 7% highs seen earlier in 2025, the segment continues to be the primary engine of domestic cost-of-living adjustments;
  • Transport costs surged 3.56% y-o-y in December after a brief reprieve in November. The sector recorded a sharp m-o-m jump of 3.10%, largely reflecting the Fuel Pricing Committee’s upward adjustment of petrol and diesel prices at year-end, before lowering them sharply this month;
  • Food and beverage also ticked up to 1.18% y-o-y in December;
  • Meanwhile, recreation, sport, and culture saw a massive monthly jump of 8.72%, likely fueled by high demand during the festive season and major international events.

Also rising significantly on a m-o-m basis: food and beverage, which rose to 0.48% from a deflationary dip in November; and transport, which jumped to 3.1%, also from a deflationary dip the previous month.

For the full year, Dubai’s inflation averaged 2.8% — its slowest annual pace since 2021, Emirates NBD said in a research note (pdf).

Heading into the new year, analysts expect price growth to moderate as the housing engine that dominated 2025 begins to cool. “We forecast a slowdown to 2.5% this year, anticipating slower housing inflation and transport inflation that will be deflationary on average,” ENBD says.

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