RIYADH: Pulled back by decelerating food and transportation prices, Dubai’s inflation rate eased to 2.05 percent in June, its lowest level since January 2022 when inflation reached 1.74 percent, according to the Dubai Statistics Center.
The slowdown of price levels aligns with inflation trends across the Gulf Cooperation Council region, as well as that of the world.
In February, a report released by Kuwait-based investment strategy and research firm Kamco Invest said the inflation rate in GCC countries is showing a downward trend this year compared to 2022.
According to the report from DSC, food and beverage prices increased by 3.8 percent in June compared to 4.8 percent in May, helping to put the brakes on the consumer price index.
Another contributor to the slowdown was transportation prices, which fell by 13.86 percent last month compared to a 7 percent fall in May 2023.
In contrast, the prices of housing, water, electricity, gas and other fuels surged for the 13th month in a row to hit a record rise of 5.94 percent last month. These have the largest relative weight in the measurement of Dubai’s CPI.
Inflation in the UAE is forecast to fall to 3.2 percent by the end of 2023, down from 4.8 percent last year, reported the minister of state for financial affairs in April.
Mohamed bin Hadi Al-Hussaini attributed the drop to price stabilization and the receding impacts of imported inflation globally.
The minister said in a meeting held on the sidelines of the 2023 Spring Meetings of the World Bank Group and the International Monetary Fund in April that the UAE’s economic forecasts remain positive, with a growth of 3.9 percent projected by the end of this year.
Al-Hussaini also noted that many countries in the region remain vulnerable to elevated global uncertainties, while rents and salaries are likely to contribute to this trend locally.
This is highlighted in the IMF Background Note, underpinning the need for regional collaboration efforts and collaboration with the Fund.
The IMF, in its World Economic Report, also noted that nearly 84 percent of countries across the globe are forecast to have lower CPI inflation growth in 2023 than in 2022
