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UAE inflation hits 18-month high in October

DUBAI — Consumer prices in the UAE climbed to an 18-month high of 1.9 per cent on an annual basis in October, mainly on rising housing and food costs, data from the National Bureau of Statistics showed on Sunday.

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Analysts expected prices in the world’s third largest oil exporter to pick up gradually this year as the country recovers from last year’s downturn.

The second largest Arab economy is seen expanding by 2.4 per cent this year following an IMF estimated contraction of 2.5 per cent in 2009, lagging behind its regional peers.

The month-to-month per cent change in consumer inflation in September and October was 0.9 per cent and 0.6 per cent, respectively.

Analysts polled by Reuters expected average inflation of 1.5 per cent in 2010. UAE inflation hit a nine-year low of 1.6 per cent last year, after a record high of 12.3 per cent in 2008.

UAE Central Bank Governor Sultan bin Nasser Al Suweidi said in January inflation will be very low for even more than one year.

The statistics office said in May it expected inflation of 1.1 per cent this year and 2.0-2.5 per cent in 2011. The base year for the UAE consumer price basket is 2007.

Giyas Gokkent, Head of Research, National Bank of Abu Dhabi, said: “I am not concerned. I would see it more as a normalisation of things.” —