Dubai May consumer prices rise 2.37% year-over-year

Dubai May consumer prices rise 2.37% year-over-year

Dubai's consumer prices rose by 2.37% year-over-year in May 2025, according to the latest data from the General Authority for Statistics [1]. This increase, while higher than the previous month's 2.3% rise, marks a moderate uptick in the city's inflation rate. The rise in consumer prices is driven by various factors, including housing rents and food and beverage costs.

The housing sector remains a significant contributor to inflation, with rental prices increasing by 7.1% for villas and 8.1% overall. This trend is fueled by strong demand and limited supply, exacerbated by major development projects like NEOM and Jeddah Central [1]. The housing, water, electricity, gas, and other fuels category, which accounts for 25.5% of the overall consumer price index (CPI), saw a year-on-year increase of 6.8%, driven primarily by the sharp climb in actual rents [1].

Food and beverage prices also increased, rising by 1.6% compared to May 2024. This increase was largely driven by a 2.8% rise in meat and poultry prices, reflecting broader trends in the wholesale sector where agricultural and fishery products jumped by 4.4% [1]. The prices of personal goods and services, including jewelry, watches, and precious antiques, rose by 4%, while catering services contributed to a 1.8% increase in restaurant and hotel prices [1].

Conversely, certain categories experienced deflationary pressures. Furnishings and household equipment prices dropped by 2.5%, with furniture, carpets, and flooring prices declining by 4%. Clothing and footwear prices fell by 0.9%, and transport costs decreased by 0.8% due to a 1.9% drop in vehicle purchases [1].

The broader inflation picture is reinforced by wholesale price data, which showed a 2% year-on-year increase in the wholesale price index in May. The rise was primarily driven by an 8.2% increase in the prices of refined petroleum products and a 9% rise in furniture and other transportable goods not elsewhere classified [1].

The UAE's economy continues to diversify, with its gross domestic product (GDP) reaching 1.77 billion dirhams ($481.4 billion) in 2024, recording 4% growth. Non-oil sectors contributed 75.5% of the total GDP, highlighting the country's progress in economic diversification [1]. In contrast, Saudi Arabia recorded a modest growth rate of 1.3% in 2024, with its non-oil sector contributing 54.8% of GDP [1].

References:
[1] https://www.arabnews.com/node/2604559/business-economy