Dubai Inflation Eases to 2.79% in March As Housing, Transport Costs Moderate

RIYADH: Dubai’s annual inflation rate eased in March, hitting its lowest level since October 2024, according to official data released by the Dubai Statistics Center.

The inflation rate in the emirate slowed to 2.79 percent in March, down from 3.15 percent in February. The decline was primarily driven by a deeper deflation in food and beverage prices, which dropped by 3.34 percent year-on-year, compared to a 0.85 percent decline in the previous month.

Dubai continues to report relatively moderate inflation compared to other major cities in the region. Analysts attribute this trend to the government’s proactive measures to maintain price stability while fostering economic growth.

Despite persistent global inflationary pressures, Dubai’s economy remains resilient, supported by a diverse mix of sectors including tourism, real estate, and trade.

Looking ahead, the UAE Central Bank has forecast nationwide inflation at 2 percent for 2025 —well below the global average. Non-tradable components of the consumer basket are expected to be the main contributors to price movements in the coming year.

The March data also pointed to continued deflation in other key categories. Food and beverage prices posted a monthly deflation rate of 0.31 percent, slightly higher than the 0.21 percent recorded in February.

Clothing and footwear prices declined 2.69 percent year on year, mirroring the previous month’s figures. Meanwhile, prices in the information and communication sector saw a 1.96 percent annual drop in March, compared to a 1.95 percent decline in February.

The data also showed a continued rise in prices within several key sectors. The housing, water, electricity, gas, and other fuels category recorded a 7.16 percent increase in March, slightly down from 7.36 percent in February.

The insurance and financial services sector experienced notable inflation as well, with prices rising 5.83 percent, up from 5.20 percent the previous month.

Price increases were also observed across health, education, and personal care, social protection, and miscellaneous goods and services. Health costs climbed 3.1 percent, education rose 2.76 percent, and personal care and related services increased 2.52 percent.

For comparison, September’s figures showed no change in health and education, while personal care had risen by 1.48 percent.

The tobacco sector registered a 2.12 percent year-on-year increase, unchanged from February. Meanwhile, prices in the recreation, sport, and culture category grew 1.66 percent, though at a slower pace compared to 3.93 percent in the previous month.

Additional monthly gains were recorded in insurance and financial services, which edged up 1.47 percent in March versus 1.41 percent in February. Prices for furnishings, household equipment, and routine maintenance rose 0.36 percent, matching the previous month’s rate. The restaurants and accommodation services category saw a 0.25 percent increase, down from 0.72 percent in February.

In a separate report published in December, FOREX.com, a subsidiary of US-based StoneX Group Inc., projected strong economic resilience for the UAE in 2025.

The outlook was supported by solid consumer spending, record-high foreign direct investment, and the nation’s ongoing economic diversification efforts, despite regional challenges.