UAE: Inflation in Dubai eases to 17-month low in June

UAE Inflation June 2023

UAE: Inflation in Dubai eases to 17-month low in June

Inflation in Dubai receded to 2.1% in June, down from May’s 3.0%. June’s result represented the lowest inflation rate since January 2022. Looking at the details of the release, the moderation chiefly reflected a softer increase in prices for food. Meanwhile, prices for transport declined at a steeper pace, falling 13.9% year on year. These developments more than offset prices for housing and utilities rising at a brisker rate.

Accordingly, the trend pointed down, with annual average inflation coming in at 4.6% in June (May: 4.9%).

Lastly, consumer prices in Dubai rose 0.24% in June over the previous month, swinging from May’s 0.15% decline.

Meanwhile, data for the UAE as a whole is not available past Q4 2022, when inflation softened to 4.6%, after it peaked—as expected—in Q3 at 6.5%. Consequently, inflation accelerated to a multi-year high of 4.8% in 2022, markedly above 2021’s 0.2% print. Meanwhile, in line with price developments in Dubai this year, price pressures in the UAE should have softened in both Q1 and Q2, bringing H1 2023’s average below that of the prior six months. Going forward, tighter monetary policy and a slowdown in economic activity suggest the downward trend should continue in the coming quarters.

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