Dubai’s annual inflation slowed to 2.43% in August, after accelerating 2.88% in July, according to the Dubai Statistics Center (pdf). The reading marks the first deceleration in annual price growth in four months, Emirates NBD said in a research note (pdf). Despite the dip, several sectors continued to record price growth.

Housing prices are cooling slightly: Price upticks came primarily from the housing, water, electricity, gas, and other fuels segment — the largest component of the basket at just over 40% — which rose 6.05% y-o-y. This does however mark the slowest pace of growth in 20 months, easing from 6.37% in July and follows on from a gradual slowdown that started earlier this year.

Other categories also still seeing inflation included education, which climbed 2.63% y-o-y for the second consecutive month, health which was up 1.38% for the second month in a row as well, and personal care and miscellaneous goods which rose 1.09%. Tobacco recorded one of the sharpest gains, rising 3.66% but holding steady on a m-o-m basis.

The biggest drags came from transport, which fell 3.49% in August after a 3.40% decline in July, and recreation, sport, and culture, which dipped 1.76%. Food and beverages slipped 0.37% y-o-y after a 0.36% rise the prior month, while information and communication edged down 0.05%. Clothing and footwear price increases eased to 0.39% from 1.02% in July, and the inflation in the ins. and financial services segment slowed to 0.85% from 1.61% the month before.

REMEMBER- The moderation in transport reflects a broader drop in petrol prices in August, even as diesel costs rose.

On a monthly basis, consumer prices edged up 0.11% in August, slowing from 0.42% in July, according to the statistics center’s monthly inflation report (pdf).

Looking ahead: Emirates NBD expects headline inflation to remain moderate through year-end, averaging 2.5% for 2025, as housing pressures continue to ease as supply picks up. The bank also noted that transport will likely provide a smaller drag going forward than in previous months, with base effects from lower oil prices this time last year expected to marginally offset the impact of cheaper petrol.

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