United Arab Emirates Inflation December 2020

United Arab Emirates

United Arab Emirates: Consumer prices record joint-smallest fall since April in December

February 3, 2021

Consumer prices increased 0.09% in December over the previous month, swinging from the 0.11% fall seen in November. December's result marked the sharpest increase in prices since June. The reading reflected higher prices for transportation, and education. However, the increase in prices was capped by lower prices for housing, water, electricity and gas, as well as for food and beverages.

Meanwhile, consumer prices declined 2.1% on an annual basis in December, a more moderate drop than November’s 2.4% decrease. December's reading marked the joint-smallest dip in consumer prices since April. Meanwhile, the trend pointed down slightly, with the annual average variation of consumer prices coming in at minus 2.1% in December (November: -2.0%).

Consumer price pressures will likely have remained subdued in the first month of the year. This year, price pressures are projected to increase, as the Covid-19 vaccine is rolled out and restrictions are eased. Moreover, higher household and capital spending should help bolster prices. Nevertheless, inflation will remain relatively muted compared with regional peers.

FocusEconomics Consensus Forecast participants expect consumer prices to grow 0.6% on average in 2021, which is unchanged from last month’s forecast. For 2022, they see inflation averaging 2.0%.

Author:, Junior Economist

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United Arab Emirates Inflation Chart

UAE Inflation december 20 20 0

Note: Year-on-year and month-on-month variation of consumer price index in %.
Source: Federal Competitiveness and Statistics Authority (FCSA).

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