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Abu Dhabi’s annual inflation rate rose to 1.5% in December 2025, up from 0.9% in November, according to data (pdf) from the Abu Dhabi Statistics Center. On a monthly basis, the consumer price index inched up to 0.4% in December, reversing a 0.3% decline the previous month, according to separate data (pdf).
Housing, water, electricity, and gas — the largest component of the basket with a 33.6% weighting — saw a 4.2% climb in December, up from 3.9% in November. Furnishings, household equipment, and routine household maintenance inched up 5.5%, albeit at a slower pace than November’s 5.9%. The ins. and financial services sector posted a 6.6% y-o-y increase, remaining unchanged for the fourth consecutive month.
Transport prices — the second largest component — returned to inflation territory (1.4%) after a 2.9% decline in November. This follows the Fuel Pricing Committee’s upward adjustment of petrol and diesel prices at year-end, before lowering them sharply in January and modestly this month. Clothing and footwear prices plummeted 12.7% y-o-y, while recreation and culture costs fell 5% y-o-y.
On a monthly basis, transport prices saw the largest jump in the basket with a 2.4% m-o-m uptick, reversing a 3.4% contraction in November. Personal care and miscellaneous goods rose 1.2% m-o-m, while tobacco inched up 0.3% m-o-m up, bouncing back from January’s decline. This comes alongside incremental growth in housing (+0.3%) and furnishings (+0.3%), as well as marginal 0.1% upticks in food, communication, and restaurants. These gains were partially offset by a 4.2% drop in recreation and culture and a 0.3% dip in hotels and restaurants, while health, ins. and financial services, and education costs remained flat.
Abu Dhabi’s inflation remains lower than Dubai’s, which accelerated to 2.99% in December, up from 2.73% in November, driven by higher transportation and food costs.
What’s next: Inflation in Abu Dhabi is expected to decline below 1.5% in 2026, supported by a potential drop in UAE oil prices, MENA economist Hamzeh El-Gaaod told EnterpriseAM.
