Inflation in Dubai rose by 0.6 per cent month-on-month in August, according to the latest data from the Dubai Statistics Centre.
The August figures represented a small pick-up from the modest monthly deflation recorded in July. On an annual basis, CPI inflation rose by 3.38 per cent, up marginally from 3.32 per cent a month earlier. Inflation has been running at 3.6 per cent year-on-year on average in the year to August, a modest acceleration from the 3.3 per cent year-on-year recorded for 2023 as a whole, Emirates NBD analysis shows.
Inflation drivers have been consistent in Dubai in 2024, data showed. Housing has risen by more than six per cent year-on-year each month in 2024 with the August housing and utilities component of the basket rising by 6.9 per cent year-on-year, according to Emirates NBD Reasearch. “The rise in housing inflation reflects the underling increase in property purchase and rental costs over the last several years. Given its large weight in the overall CPI basket at more than 40 per cent, housing costs exert a strong influence on inflation overall,” Edward Bell, head of market economics at Emirates NBD Research, said in a note.
Elsewhere in the August data, transport costs were up by 0.3 per cent month-on-month, though lower on an annual basis. The food and beverage subcomponent also increased month-on-month, up by 0.6 per cent and was up by 2.8 per cent year-on-year. “Transport costs, which account for more than 9 per cent of the basket, tend to show more volatility on a monthly basis as they are influenced by market costs for oil and refined products,” Bell wrote.
There was also a monthly jump in recreation prices, up 4.6 per cent month-on-month and reversing the annual deflation print for July. Other key contributors to inflation in Dubai this year have been financial services (up 5.9 per cent year-on-year in August) and education fees which have been stable at 3.1 per cent year-on-year for the last five months.
Emirates NBD expects Dubai CPI inflation at 3.5 per cent year-on-year on average in 2024, an acceleration from 3.3 per cent recorded last year. “Cooling oil prices and energy costs will act as a drag on prices in the final months of the year. Brent oil futures have averaged $73 per barrel since the start of September 2024 compared with $92 per barrel for the same period in 2023. Housing price inflation will, however, act as a floor to CPI as the index increasingly reflects higher housing prices,” Bell wrote.