Dubai's annual inflation rate slowed to 5.03 per cent in September, down from 5.54 per cent in August and a 2026 peak of 5.7 per cent in June, according to newly released data. On a monthly basis, prices also edged down 0.05 per cent compared with August.
Transport remains the single largest driver of price pressure in the emirate. Fuel costs jumped 37.52 per cent year-on-year, while air passenger fares climbed 13.48 per cent annually. The surge traces back to Brent crude trading near $110 a barrel through September, a level more than 70 per cent above pre-conflict prices amid ongoing Middle East tensions.
Travel-related costs offered some relief on a monthly view: airfares fell 23.44 per cent and holiday packages dropped 12.47 per cent compared with August. Housing and food, however, kept climbing, up 6.23 per cent and 8.05 per cent respectively year-on-year.
Alongside the inflation figures, Dubai's Purchasing Managers' Index rose to 54.5 in September from 54.1 in August, marking the fastest pace of business activity growth recorded so far this year. The combination of easing price pressure and strengthening output points to a degree of resilience in Dubai's economy even as energy costs stay elevated.
Economists watching the emirate's cost trends say the disinflation trend could continue into the final quarter of the year, provided global oil prices hold steady and transport-cost pressure eases further. For now, businesses across Dubai appear to be absorbing higher energy costs while still expanding activity, a pattern reflected in the stronger PMI reading.