Dubai’s consumer inflation rose to 4.6 percent in April, when compared on a year-on-year basis. This was the highest reading since May 2015, according to a report from Emirates NBD.
For the month-on-month figure, consumer prices rose 1.2 percent, the biggest monthly increase since January 2018, according to new data from the Dubai Statistics Center.
Khatija Haque, Head of Research and Chief Economist at Emirates NBD, said: “The main driver of inflation in Dubai in recent months has been transport costs, which were up 28.8 percent year-on-year in April, accounting for around half of headline inflation.
“Food prices (8.6 percent higher year-on-year) were the second biggest driver of inflation in April, followed by recreation and culture costs and restaurant and hotel prices.”
The only component of the CPI basket which declined on an annual basis in April was housing and utilities. However, even here the rate of decline has slowed and Emirates NBD expects housing inflation in the CPI to turn positive in the coming months.
“We maintain our forecast for UAE inflation to average 4.3 percent in 2022 as higher food, housing and services costs feed through to the CPI, even as a stronger dollar helps to keep goods inflation contained.”
The Dubai Statistics Center re-based the time series to 2021 (from 2014 previously) and as a result, the weights of the components making up the consumer price index (CPI) have changed.
The biggest revisions were to the weights of housing (down) and education (up). Housing now accounts for 40.68 percent of the CPI basket, down from 43.70 percent previously.
Education now accounts for more than 8 percent of CPI, double what it did before. A new category for “insurance and financial services” has been introduced into the CPI basket, which was likely previously included in “miscellaneous goods and services”, with a weight of 1.26 percent.
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