Dubai: Annual inflation slowed in March

Headline CPI inflation in Dubai slowed to 2.8% y/y in March, down from 3.2% over the previous two months and the slowest pace of annual price growth since October last year. Prices were 0.1% lower compared with February, marking the first monthly deflation since July 2024. Inflation over the first quarter averaged 3.0% y/y, slightly more than our 2025 forecast of 2.8% but we expect that price growth will be more modest through the remainder of the year than we have seen in Q1.

Our expectation of softer headline inflation in the coming months is largely on the back of lower global oil prices, which have already come down sharply in April. This will be reflected in prices at the pump and in the transport component of the basket, which accounts for just over 9% of the total. Transport has already been a key factor in keeping headline inflation down over recent months, and in March it was down 3.3% y/y, reflecting the fact that a litre of super 98 in March 2025 cost 9.9% less than it did in March 2024. In April the same amount of petrol costs 18.4% less than a year earlier meaning the drag from transport will be even sharper in the next inflation print and through the rest of the year – we forecast an average Brent crude price of USD 68/b this year, down from USD 80/b in 2024.

Click here to download March Dubai inflation report