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UAEís annual inflation rises in April, prices fall in Dubai
(Staff Report) / 17 May 2012
Consumer prices, or inflation, in the UAE touched a nine-month high of 0.8 per cent last month on an annual basis and prices rose by 0.1 per cent on the month, according to the data released from the National Bureau of Statistics on Wednesday.
Analysts expected prices in the UAE, one of the world’s top five oil exporters, to pick up gradually in 2012, but inflation should still remain in low single digits as bank lending and property market in the Gulf country remain weak. The second largest Arab economy is seen expanding by 3.1 per cent in 2012, down from an IMF estimated 4.9 per cent in 2011.
Giyas Gokkent, chief economist, National Bank of Abu Dhabi, said: “The UAE annual year-on-year inflation rate is expected to possibly dip into negative territory in June, then bounce back because of base effects, but essentially remain very low; less than 1 per cent for most of the year.”
“Rent decline in Abu Dhabi is expected to continue to weigh down on UAE inflation,” he added.
Consumer prices in Dubai fell at a 1.5 per cent annual rate in April and 0.2 per cent from March, extending deflation into a fifth consecutive month mainly due to a drop in food prices, according to Dubai Statistics Centre data.
Dubai has seen prices fall by 1.4 per cent on average so far this year in its deepest period of deflation since prices jumped by record 10.8 percent in 2008.
Annual falls hit 1.9 per cent in March as the property market remains flooded with new residential units after a speculative bubble burst led to a $25 billion debt restructuring in a state-owned conglomerate in 2009-2010.
The month-on-month price fall in the Gulf trade and business hub was the smallest fall since December, the data released by Dubai Statistics Center showed.
Costs of housing including rents and utilities dipped by 0.1 per cent month-on-month in April, which was the smallest decline this year. The item, which accounts for nearly 44 percent of consumer expenses in the coastal desert emirate, dropped by 1.3 percent in March.
Dubai house prices may finally stop falling this year, a Reuters poll showed this month, although a glut of oversupply will dog the market for some time and keep property developers away. But food prices in Dubai’s $82 billion economy dived 1.6 per cent in April compared with the previous month, the most in three months, while transport costs were flat, the data also showed.
In Abu Dhabi inflation accelerated to a nine-month high of 1.8 per cent in April with prices rising 0.2 per cent month-on-month, data showed last week.
With inputs from Reuters
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