UAE: Inflation in Dubai recedes to 15-month low in May
Inflation in Dubai receded to 3.0% in May, down from April’s 3.3%. May’s result represented the lowest inflation rate since February 2022. Looking at the details of the release, May’s moderation chiefly reflected softer price increases for food. Meanwhile, prices for transport fell at a slower pace than in the prior month. These price developments more than offset prices for housing and utilities increasing at a brisker rate.
Accordingly, the trend pointed down slightly, with annual average inflation coming in at 4.9% in May (April: 5.0%).
Lastly, consumer prices in Dubai fell 0.15% in May over the previous month, swinging from April’s 0.21% increase. May’s result was the steepest fall in prices since January.
Meanwhile, data for the UAE as a whole is not available past Q2 2022, when inflation accelerated to 6.8% (Q1 2022: 3.4%). That said, in line with price developments in Dubai, price pressures in the UAE should have peaked in mid-2022 and then eased at the end of the year. Moreover, our panelists believe the downward trend should continue in H1 2023 as interest rates have risen further and external price pressures dimmed.