Dubai inflation slips from June high as transport costs retreat

Dubai’s annual inflation eased to 5.3% in July from 5.7% in June, according to EnterpriseAM calculations based on the latest Consumer Price Index data (pdf) from the Dubai Statistics Center. On a monthly basis (pdf), consumer prices also eased, edging up just 0.1%, down from a 0.4% rise in June.

Transport takes its foot off the gas: Transport prices were still up 11.9% y-o-y in July but slowed sharply from an 18.1% increase in June. Prices in the category fell 3.6% m-o-m, helping pull the headline rate lower. Transport’s contribution to inflation fell to 1.1 percentage points from 1.7 points in June; however, this dip may be temporary due to fuel price hikes for August, according to Emirates NBD (pdf).

But other price pressures persist: Food and beverage inflation rose to 7.8% y-o-y from 7.6% in June, while housing and utilities climbed 7.0%. Housing — the largest component of Dubai’s CPI basket — remained the biggest contributor to headline inflation at 2.8 percentage points, despite a slight slowing of price growth. Recreation, sport, and culture prices climbed 8.1%, while restaurants and accommodation services rose 4.5%.

BACKGROUND- June’s 5.7% print was driven largely by transport and food costs, with fuel and lubricant prices up 48.3% y-o-y. Emirates NBD had expected inflation to ease through the rest of the year and fall to 2.9% by year-end.

June may have been the peak, but the path down could be bumpy: Emirates NBD wrote in a separate note (pdf) that the July slowdown strengthens its view that inflation topped out in June, but it expects a temporary rebound in August after Super 98 petrol prices rose 5.9% m-o-m. The bank still sees inflation easing through the rest of 2026, although risks to its 2.9% year-end forecast are tilted to the upside amid lingering food and housing pressures.