Living in Dubai can be exciting but when the cost of housing, groceries, and even basic needs keep shifting, it’s easy to feel overwhelmed. You budget, you cut back, and still, things feel tight. So what’s actually going on with prices?
Let’s break down what inflation looked like in May 2025 and what it means for your wallet.
Inflation Slowed to 2.37% But It’s Complicated
You might’ve heard that inflation in Dubai dropped to 2.37% this May. Sounds like good news, right?
Well, not exactly.
Last year, the annual inflation rate in May was 3.81%, so yes—there’s a slowdown. But it doesn’t mean that prices are dropping overall. It just means they’re rising slower than they were before. And some essentials are still going up, quietly eating into your monthly budget.
What’s Gone Up: Essentials You Can’t Avoid
According to the latest report from Dubai Digital, 11 major spending categories saw price increases over the past 12 months. These are the ones that hurt the most:
Big Increases Over the Past Year
| Category | Yearly Increase |
|---|---|
| Housing, water, electricity & gas | +6.85% |
| Health | +3.02% |
| Tobacco | +2.49% |
| Education | +2.47% |
| Personal care & social protection | +2.34% |
| Entertainment, sports & culture | +1.74% |
| Insurance & financial services | +1.02% |
| Clothing & footwear | +0.87% |
| Restaurants & hotels | +0.48% |
| Food & beverages | +0.33% |
| Furniture & home repairs | +0.29% |
Notice something?
It’s not just one category going up—it’s your rent, your doctor’s bills, your kid’s tuition, and even your groceries. These aren’t things you can just skip.
Where You’re Saving (For Now)
Here’s the silver lining: some costs have gone down—at least for now.
Biggest Decreases Over the Year
- Transportation: -8.75%
- Information & Communications: -1.75%
If you drive or rely on public transport, you might’ve noticed fuel prices or fares easing slightly. That’s helping some families manage—but it doesn’t cancel out those housing or school fees rising quietly in the background.
What Changed Just Last Month?
On a month-to-month basis, inflation in May actually shrank by 0.18%. Sounds small, but here’s what shifted:
Monthly Price Drops
- Entertainment, sports, and culture: -7.52%
- Restaurants and hotels: -1.32%
- Transportation: -1.22%
- Furniture & home repairs: -0.14%
- Information & communications: -0.03%
Monthly Price Hikes
- Food & beverages: +0.42%
- Tobacco: +0.37%
- Housing & utilities: +0.37%
- Clothing: +0.19%
- Personal care: +0.04%
So even when inflation slowed, the cost of groceries and rent still ticked up.
So What Does This Mean for You?
You might be asking: If inflation is lower, why do I still feel broke?
That’s because inflation data shows averages, but your personal experience depends on what you spend money on. If you’re renting, paying for school, dealing with health issues, or just trying to feed a family—you’re still under pressure.
Even small increases add up fast.
How to Stay Ahead When Prices Are Unpredictable
Feeling stuck? You’re not powerless. Here are some small steps that can help stretch your dirhams:
- Track your spending. See where your money’s really going.
- Renegotiate rent or utilities. Some landlords or providers offer discounts or flexible plans.
- Shop smarter. Bulk buying, discounts, and shopping locally can really help.
- Use public resources. Government support, community groups, and local charities can offer relief.
- Plan monthly check-ins. Review your expenses like a ritual. It keeps you in control.
FAQ: Inflation in Dubai 2025
Q: What is the inflation rate in Dubai for May 2025?
A: It was 2.37%, down from 3.81% in May 2024.
Q: Which categories saw the highest price increases?
A: Housing and utilities (+6.85%), health (+3.02%), and tobacco (+2.49%).
Q: Did any prices go down recently?
A: Yes—transportation (-8.75%) and communications (-1.75%) saw noticeable drops.
Q: Why do I still feel the cost of living is high?
A: Essentials like housing, food, and healthcare are still rising—even if overall inflation is lower.
Q: What can I do to manage rising costs?
A: Track expenses, cut non-essentials, seek support programs, and review your budget monthly.