UAE inflation falls sharply

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UAE inflation falls sharply

DUBAI — Inflation in the UAE witnessed a sharp decline of more than 50 per cent in August compared to the previous month, data from the National Bureau of Statistics showed.

By Abdul Basit

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Published: Sun 18 Sep 2011, 10:52 PM

Last updated: Tue 7 Apr 2015, 5:51 AM

The country’s inflation slowed to 0.6 per cent in August from 1.3 per cent in July, according to data released on Saturday.

The consumer price index, or CPI, declined 0.1 per cent in August from July, it added.

For the first time this year, the CPI fell below one per cent; consumer price growth in the country had been holding above one per cent until July 2011.

Index heavyweight housing fell 0.74 per cent in August from July and it was down 3.16 per cent from August last year, mainly due to the continued drop in the country’s rents.

Another giant, food prices, jumped 0.49 per cent last month, which coincided with the holy month of Ramadan, a period of fasting.

During Ramadan, major retail outlets in the country had agreed to fix the prices of 400 major commodities at 70 retail outlets following the UAE Ministry of Economy’s nationwide campaign. These outlets include Carrefour, cooperative societies, Lulu Hypermarket and Spinneys, which form 75 per cent of the market share of retail outlets in the UAE. They agreed to maintain the prices until the end of 2011.

Transport costs, the third largest basket component with a 10 per cent weightage, increased up 0.01 per cent from July, but jumped 1.5 per cent from August last year.

Analysts polled by Reuters expected average inflation of 2.5 per cent in 2011 while the International Monetary Fund forecasts an inflation rate of 4.5 per cent for the year.

In March, the UAE’s central bank governor said inflation was not a worry, adding that consumer price growth should range around very low single-digit rates.

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