UAE inflation skyrockets to 9-month peak
Inflation in the United Arab Emirates edged up to a nine-month high of 0.8 per cent on an annual basis in April despite an ongoing price decline in its trade and business hub Dubai, data showed yesterday.
Price pressures in the UAE, one of the world's top five oil exporters, remain subdued with both the housing market and bank lending weak following a speculative bubble burst in 2008.
Annual consumer price growth in the $360 billion economy, the second largest among Arab countries, picked up again in December after two consecutive months of mild declines. Inflation stood at 0.6pc in March.
"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 1pc for most of the year," said Giyas Gokkent, Chief Economist at National Bank of Abu Dhabi.
Costs of housing including rents and utilities in the UAE were flat month-on-month in April after a 0.7pc fall in the previous two months. The item accounts for 39 percent of consumer expenses in the federation of seven desert emirates.
Food prices dropped by 0.5pc in April, while transport costs were 0.3pc up from the previous month. Overall, consumer prices in Dubai fell at a 1.5pc annual rate in April and 0.2pc from March, extending monthly deflation into a fifth month in a row mainly due to a drop in food prices, the data showed.