Dubai inflation eases as fuel shock fades

By Daniel Richards

July slowdown in Dubai’s headline annual inflation rate to 5.3% strengthens our conviction that price growth peaked at mid-year.
Lower transport costs drove July’s price-growth moderation, but August petrol-price hike may trigger temporary rebound in inflation.
Gradually slowing housing inflation to reduce pressure from largest contributor to headline price growth; lingering pass-through from supply-chain disruptions boosts food, hospitality costs.

Dubai inflation eased in July as the fuel shock faded, supporting our view that price growth peaked in June. We expect inflation to slow through the rest of 2026. But the decline is likely to be uneven, and risks to our 2.9% year-end forecast are tilted to the upside given lingering pressures in food and housing.

Headline inflation slowed to 5.3% year on year in July, from 5.7% in June. Monthly price growth also eased, to 0.1% from 0.4%, the slowest pace since February.

Transport was the clearest source of disinflation. Annual price growth in the category slowed to 11.9%, from 18.1% in June, as transport costs fell 3.7% on the month. Fuel and lubricant inflation eased to 24.1% year on year, from 48.3%, with prices down 12.7% from June. The move tracked the decline in local petrol prices. In July, a litre of Super 98 cost 25.9% more than a year earlier, down from 53.1% in June...

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