Consumer prices in Abu Dhabi declined for the second consecutive month in May, with inflation falling 0.6% year-on-year, marking a sharper drop than April’s marginal 0.1% decline, according to data from the Statistics Centre – Abu Dhabi. Every month, prices inched up just 0.1%, following flat growth in April.
The most significant annual drag came from the transport category, which fell 14.4%—the second-biggest component of the index—while food and beverage prices slipped 0.9% y-o-y. Offsetting these declines were substantial increases in categories such as recreation and culture, which jumped 17.7%, and insurance and financial services, which rose 13.5%.
Monthly, recreation and culture saw the sharpest gains, rising 5.5%, followed by restaurants and hotels, which increased by 1.2%. Meanwhile, clothing and footwear prices dropped 1.2% m-o-m.
In neighboring Dubai, inflation ticked up slightly to 2.37% in May from 2.31% in April, marking the end of a four-month trend of softening since the January peak of 3.22%, according to Emirates NBD.
The UAE’s broader inflation outlook remains subdued. The IMF recently revised its 2025 inflation forecast for the UAE slightly upward to 2.1%, from 2.0% previously. The Central Bank of the UAE expects inflation to average 1.9% this year, citing easing transport costs and moderating energy prices as key drivers of disinflation.
