Dubai's inflation rate eased slightly in September from the previous month, even as rising oil prices pushed up the cost of petrol.
Inflation on an annual basis stood at 5.03 per cent, down from the 5.54 per cent recorded in August and the 5.7 per cent peak for this year reached in June. .
The figures were released by the Dubai Data and Statistics Establishment on Tuesday.
Meanwhile, Dubai’s General Monthly Consumer Price Index decreased by 0.05 per cent month-on-month in September on falling airfares and cheaper holiday packages.
Airfares on a monthly basis fell by 23.44 per cent and holiday packages dropped 12.47 per cent from the August level.
However, on an annual basis, the transport division was the biggest contributor to the rise in consumer prices in September, climbing 14.7 per cent.
The increase in transport charges was driven by a 37.52 per cent rise in the cost of fuels and lubricants for personal transport, as well as a 13.48 per cent rise in passenger transport by air, according to the latest government data.
Biggest contributor
The transport segment, which accounts for 9 per cent of Dubai’s Consumer Price Index basket, has been the main driver of inflation in the emirate over the past several months amid a rise in prices petrol prices.
The UAE lifted fuel subsidies in 2015 and prices are evaluated on a monthly basis, based on movements in global markets. Petrol prices in the Emirates rose for a third consecutive month for October as prices in global oil markets remain elevated amid escalating geopolitical concerns in the Middle East.
Global crude prices, which surged by nearly 109 per cent during the peak of the war, now in its eighth month, are still more than 70 per cent higher on concerns of a possible resumption in fighting between the US and Iran.
Brent crude, which hovered around the $110 per barrel mark in September, has largely remained above $100 over the past few weeks.
The West Texas Intermediate benchmark passed $105 a barrel in September as the Strait of Hormuz remained a flashpoint. Increasing attacks on Saudi infrastructure in the Red Sea by the Houthi rebels in Yemen have added another layer of risk to energy supplies from the region.
Rebound
Despite economic headwinds, Dubai's economy has largely skirted the deeper slump experienced by some neighbours.
Non-oil private sector business activity in the emirate, which is one of the largest business and tourism centres in the Middle East, also maintained a sharp growth trajectory.
The Purchasing Managers' Index stood at 54.5 in September, up from 54.1 in August, indicating a “solid improvement” in Dubai, as the pace of growth was fastest in 2026, S&P Global Markets Intelligence said earlier this month.
The boost to the emirate’s non-oil economic activity was largely driven by a “sharp and accelerated increase in output” as new orders also rose markedly and employment in the emirate rose, according to the PMI survey data.
The tourism and retail sectors in the emirate have also bounced back from the initial shock of the war. Property, among the top contributors to the emirate’s economy, has also held up relatively well.
The food and drinks category increased by an annualised 8.05 per cent last month, while housing, water, electricity, gas and domestic fuel rose by almost 6.23 per cent, “as a result of the growth of the average residential rental prices in most areas of the emirate during September”, the latest government data shows.
