Headline Inflation Data
The UAE recorded an average annual inflation rate of 2.1 percent in 2024, measured by the Consumer Price Index (CPI) published by the Federal Competitiveness and Statistics Centre (FCSC). This represents a moderation from the 2.3 percent recorded in 2023.
| Period | CPI Annual Change (%) |
|---|---|
| Q1 2024 | 2.4 |
| Q2 2024 | 2.2 |
| Q3 2024 | 1.9 |
| Q4 2024 | 1.8 |
| Full Year 2024 | 2.1 |
CPI Breakdown by Category (2024 Annual Average)
| Category | Weight (%) | Annual Change (%) |
|---|---|---|
| Housing, Water, Electricity, Gas | 32.9 | 3.1 |
| Food and Beverages | 13.1 | 1.8 |
| Transport | 11.4 | -0.6 |
| Education | 7.2 | 2.9 |
| Restaurants and Hotels | 6.8 | 3.4 |
| Recreation and Culture | 5.1 | 1.2 |
| Furnishing and Household | 4.8 | 0.8 |
| Health | 4.3 | 2.1 |
| Communication | 3.9 | -0.3 |
| Clothing and Footwear | 3.6 | 0.5 |
Housing costs remain the dominant inflation driver, reflecting rental market tightness across Dubai and Abu Dhabi. The restaurants and hotels category recorded the highest annual increase, driven by tourism demand and input cost pass-through.
Emirate-Level Variation
| Emirate | Annual CPI Change (%) |
|---|---|
| Dubai | 2.5 |
| Abu Dhabi | 1.9 |
| Sharjah | 1.6 |
| Northern Emirates (avg.) | 1.3 |
Dubai consistently records above-average inflation due to higher rental growth and greater exposure to imported services inflation. Northern Emirates exhibit lower inflation owing to more stable housing markets and lower services intensity.
Historical Trend (2019-2024)
| Year | Annual Inflation (%) |
|---|---|
| 2019 | -1.9 |
| 2020 | -2.1 |
| 2021 | 0.2 |
| 2022 | 4.8 |
| 2023 | 2.3 |
| 2024 | 2.1 |
The deflationary period of 2019-2020 reflected VAT base effects and pandemic-related demand contraction. The 2022 spike corresponded to global commodity price surges and post-pandemic supply chain disruptions.
Forecast and Outlook
Consensus estimates project UAE inflation of 2.0-2.4 percent for 2025, with upside risks concentrated in housing and education. The AED peg to the US dollar means UAE monetary policy mirrors Federal Reserve decisions, limiting domestic inflation management tools. Fiscal policy, including housing supply initiatives and subsidy programmes, represents the primary lever for inflation moderation.
Methodology
CPI data is sourced from the FCSC national accounts and supplemented by emirate-level statistical authorities. Category weights reflect the 2024 expenditure basket revision. All figures represent year-on-year percentage changes unless otherwise stated.