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Dubai’s annual inflation rose to 3.15% in January, up from 2.89% in December, according to figures (pdf) from the Dubai Statistics Center. The higher inflation reading was mainly driven by increased inflation in the price of housing, water, electricity, gas and other fuels.
The breakdown: Prices of housing, water, electricity, gas, and other fuels — the largest component of the basket of goods and services — increased at a pace of 7.19%, just shy of the 12-month high of 7.23% in December. However, food and beverage prices declined 0.08%, annual transportation inflation fell 2.38%, information and communication went down 2.09%, and clothing and footwear inched down 1.04% during the month. Meanwhile, personal care and social protection inflation rose at a slower rate of 1.42%, down from its 2024 peak of 3.25% in November and the subsequent drop to 1.94% recorded in December.
REMEMBER- Fuel prices fell in December by nearly 5% and were kept unchanged in January, except for a marginal increase in diesel, following a 3% price increase in November.
Month-on-month, Dubai’s inflation fell by just 0.01% in January, down from an increase of 0.45% in December, according to the statistics center’s monthly inflation report (pdf).
Overall inflation is expected to remain unchanged across the GCC: Emirates NBD sees inflationary pressures remaining constant in 2025, predicting an average 2.1% inflation rate for the second consecutive year across the bloc. For Dubai and Saudi Arabia specifically, the year could see a considerable increase in housing prices, not unlike last year when they were averaging almost 7% in Dubai and 9% in the Kingdom between January and November of 2024.
The UAE’s overall inflation figure is set to remain contained: The International Monetary Fund recently revised down the UAE’s inflation forecast for the year, expecting it to remain contained at 2% — down from its December forecast of 2.1% inflation. This comes “despite higher housing and utilities-related costs.” The CBUAE shared the Fund’s prediction of 2% inflation in 2025, driven by non-tradeable components of the consumer basket, while partially offset by moderating energy prices.
