Dubai inflation rose slightly to 2.9 per cent on an annual basis in September, up from 2.4 per cent in August, on the back of higher costs for housing and utilities, according to the latest data from Dubai Statistics Centre.
Housing, utilities and fuels, which account for the biggest part of the consumer price index at more than 40 per cent, rose 5.82 per cent yearly in September. This was due to the rise in housing prices, as apartments and villa rents continued to increase in Dubai.
Transport costs for September fell 0.87 per cent year-on-year, while information and communication prices also fell 0.05 per cent during the month, the data showed.
Clothing and footwear prices rose 1 per cent and food and beverage costs rose 0.15 per cent.
The costs of education, restaurants and accommodation services, personal care, social protection and miscellaneous good and services also increased during the month.
"Dubai inflation edged up in September largely as a result of there being less of a drag from the transport prices," Scott Livermore, Oxford Economics' chief economist for the Middle East and North Africa said.
"This reflects that the year-on-year decline in oil prices is easing and this is likely to continue in the fourth quarter, although global oil prices are more likely to fall than rise. As a result, the headline inflation rate could tick up further.
"Partially offsetting this is less pressure from housing and as the rate of rental inflation continues to subside. Overall, inflation is expected to remain modest in Dubai," he estimated.
Inflation in the UAE has eased, thanks to lower energy and food costs, the Central Bank said in its quarterly report in September. Prices increased 0.6 per cent in the second quarter, with the regulator lowering its 2025 inflation forecast to 1.5 per cent on moderating transport costs, as well as food and non-energy commodity prices. Inflation is expected to edge up slightly to 1.8 per cent in 2026.
The latest data comes as Dubai's economy continues to grow on diversification efforts.
Dubai's economy grew by 4 per cent annually in the first quarter of 2025, backed by expansion across several key sectors. The emirate's gross domestic product rose to Dh119.7 billion ($32.6 billion) in the three months that ended in March, according to the Dubai Media Office.
In terms of value, the wholesale and retail trade sector was the biggest at Dh27.5 billion, up 4.5 per cent year-on-year and contributing nearly a quarter to Dubai's economy in the first three months. Activity in real estate rose 7.8 per cent to about Dh9 billion.
Meanwhile, the handover of more than 72,000 homes this year is expected to stabilise rents in Dubai, reducing pressure on tenants and offering them more choice, according to a July report by property portals Bayut and dubizzle.
