Dubai CPI was unchanged at 3.3% y/y in December

Dubai CPI was unchanged at 3.3% y/y in December

24 January 2024, Emirates NBD

Dubai CPI rose 0.6% m/m in December, taking the annual rate to 3.3% y/y, unchanged from November. Food prices declined -0.2% m/m (4.2% y/y) last month, which helped to offset a 0.5% m/m (6.1% y/y) rise in housing and utilities prices. Transport costs rose 0.4% m/m but were down -5.8% y/y, while other services costs including recreation, hospitality and personal services also increased in the final month of 2023.

Average CPI in Dubai for 2023 came in at 3.3%, slightly below our 3.5% forecast, and down from the 4.7% average recorded in 2022. Housing and household durables saw the fastest price growth on average last year at 5.7% and 8.1% respectively, sharply higher than in 2022, and we expect housing to be a key driver of inflation again in 2024. Food inflation moderated to 4.6% on average last year, down from 6.7% in 2022, while services inflation slowed sharply. The main driver of disinflation last year however was transport costs, which declined -4.9% on average, following a 22% increase in 2022, largely reflecting lower fuel prices. Overall, we expect inflation to moderate further to average 3.0% this year.

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