Dubai's inflation may have peaked in June, Emirates NBD says

Dubai's inflation may have reached its high point for the year. Emirates NBD expects price growth to ease through the rest of 2026 after inflation climbed to 5.7% in June, with lower oil prices, a stronger USD and improving shipping conditions set to take some of the heat out of consumer prices, according to an Emirates NBD report (pdf).

Headline inflation rose from 5.5% in May, driven largely by transport and food costs, although monthly price growth slowed to 0.4%, the weakest pace since February. Transport remained one of the biggest drivers of inflation in June, with prices up 18.1% y-o-y as higher fuel costs filtered through to consumers. Fuel and lubricant prices jumped 48.3%, while passenger airfares were up 16.5% from a year earlier.

Food inflation also picked up pace, rising 7.6% y-o-y in June from 6.7% in May. Housing kept overall inflation elevated even as it cooled: the housing and utilities category — more than a third of Dubai's consumer price basket — slowed to 7.1% in June from 7.3% a month earlier, which Dubai authorities attributed to higher residential rents across much of the emirate.

There are early signs travel-related prices are softening, too. PMI data showed tourism businesses cut selling prices for a second straight month in June, while accommodation prices fell 8.5% from May and package holiday prices dropped 4.3% — pointing to further relief later this year.

What's next: Emirates NBD expects inflation to fall to 2.9% by year-end as petrol prices — already down from June levels despite Brent's rebound this month — feed through. The bank is clear-eyed that the path down could be uneven, flagging continued uncertainty around shipping through the Strait of Hormuz as the main risk to that call.