UAE: Inflation rises in April from March
Latest reading: Consumer prices in Dubai rose 4.8% on a year-on-year basis in April, following a 3.8% increase in the previous month. April’s reading was the strongest since February 2023.
Relative to the prior month’s figures, there were higher price pressures for food and beverages (+7.7% in annual terms vs +6.6% in March) and transport (+11.1% vs +0.7% in March). Finally, the variation in housing and utilities prices was the same as in the prior month (+7.4% in April and March).
The jump in transport costs reflected higher fuel and freight costs as global energy prices surged in light of the closure of the Hormuz Strait, a factor that also pushed up food price pressures.
Finally, consumer prices in Dubai increased 1.29% in April on a month-on-month basis, following a 0.93% rise in the prior month.
Outlook: Inflation should gradually cool over the coming quarters, returning to the tepid levels seen before the Iran war broke out as trade disruptions in the Hormuz Strait lessen.