Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
Dubai’s annual inflation rate eased to 5% in September 2026 from 5.5% in August and a peak of 5.7% in June, according to Kamco Invest’s GCC inflation report.
Transport costs rose 14.7% year on year, making them the largest contributor to annual inflation.
Prices of fuels and lubricants for personal transport increased 37.5% from a year earlier, while passenger airfares rose 13.5%.
Kamco Invest said elevated global oil prices fed through to UAE retail fuel prices, which are set monthly in line with international markets.
Food and drink prices rose 8.1% year on year. Prices in the housing, water, electricity, gas and domestic fuel category increased 6.2%, driven by higher average residential rents across most areas of Dubai.
Dubai’s consumer price index edged down 0.05% from August, mainly because airfares fell 23.4% and holiday package prices declined 12.5% over the month.
For the UAE as a whole, the Central Bank of the UAE (CBUAE) forecast in its latest quarterly report that inflation would average 2.4% in 2026 before easing to 1.9% in 2027, below global averages in both years.
The central bank said the near-term outlook continued to be shaped by supply pressures linked to regional uncertainty and its effects on global energy markets, shipping costs and food prices.
It expects those cost pressures to ease in 2027, while measures supporting price stability remain effective.
Across the GCC, Kamco Invest attributed recent price pressures mainly to higher food and transport costs linked to the regional conflict and disruption to shipping through the Strait of Hormuz.
Annual inflation reached 3.2% in both Oman and Bahrain in September, with food prices rising 8% in each country. Transport costs climbed 11.6% in Bahrain and 4.7% in Oman.
Saudi Arabia recorded annual inflation of 1.9% in September, with housing rents rising 3.5%. Kamco Invest cited annual inflation of 4.1% for Qatar in August and 2.2% for Kuwait in July.
Kamco Invest said energy subsidies, administered prices and currency pegs helped contain inflation in the GCC compared with the wider region.
The International Monetary Fund expects GCC inflation to average 2.7% in 2026, ease to 2.4% in 2027 and return to 2% from 2028, according to the report.
