UAE: Inflation in Dubai picks up in August
Inflation in Dubai rose to 2.3% in August, up from the prior month’s 20-month low of 1.0%. Looking at the details of the release, the acceleration reflected stronger price increases for food. Moreover, prices for transport fell at a more moderate year-on-year pace. These developments more than offset softer price increases for housing and utilities.
Still, the trend pointed down, with annual average inflation falling to 3.7% in August, down from July’s 4.1%.
Lastly, consumer prices in Dubai rose 0.49% in August over the previous month, accelerating from July’s 0.44% rise.
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 2022 at 6.5%. Consequently, in 2022 inflation accelerated to a multi-year high of 4.8%, markedly above 2021’s 0.2% print. Meanwhile, in line with price developments in Abu Dhabi—by far the largest of the seven economies—and Dubai this year, price pressures in the UAE should have softened in Q1 2023 and further in 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 coming quarters.