Rise expected in UAE's inflation figures, S&P Global says

S&P Global Market Intelligence anticipates an uptick in UAE inflation figures for the third quarter, according to their principal economist, David Owen. The expected increase in inflation is primarily driven by a sharp rise in non-oil private sector businesses' selling prices. Since May 2011, sales prices have surged in the UAE's non-oil private sector, with 13% of firms reporting higher prices in September compared to 5% that noted declines, as reported by Owen.

The inflation rate is notably strong considering past data usually indicates a more cautious approach to price hikes among non-oil companies. This surge in selling prices is also fueled by heightened costs for materials, labor, and energy due to the ongoing Iran war. The seasonally adjusted S&P Global UAE Purchasing Managers' Index for September remained unchanged at 55.3, indicating ongoing economic growth, but the Output Prices Index suggests that consumer prices may rise significantly at the end of the third quarter, indicating an accelerating annual inflation rate.

This acceleration is attributed to the sharp increase in fuel prices, with petrol costs in the UAE soaring approximately 80% since February. The disruption in the Strait of Hormuz has exacerbated supply chain issues, thereby driving up material and input costs. Currently, inflation figures for the third quarter have not been released.

Since 2009, S&P Global Markets Intelligence has been tracking the S&P Global UAE PMI Index, a composite indicator that provides a snapshot of the non-oil private sector's operating conditions. The index, which is derived from responses from a panel of around 1,000 non-energy private sector companies, has revealed that input cost pressures have been persistently above the long-run trend since March 2026.

The recent surge in selling prices across various sectors of the non-oil private sector economy is broadly reflective of this trend, according to Owen.