UAE inflation up 1.7 percent in June
Annual inflation in the UAE soared to 1.7 percent in June as food prices hit a nine-month high, official data showed yesterday, but the housing component helped contain price pressures.
On the month, living costs rose to an eight-month high of 0.4 percent in June, after a 0.2 percent rise in May, data from the National Bureau of Statistics showed.
Consumer price growth in the world's third-largest oil exporter hovered close to 1 percent for most of 2010 as the debt woes of Dubai state-owned companies depressed bank lending and the once-booming property sector remained weak.
'I would assume that inflation continues to rise, driven by food prices and the transport category,' Giyas Gokkent, chief economist at the National Bank of Abu Dhabi, was quoted as saying in our sister publication, the Gulf Daily News.
Inflation in the Opec member climbed to a three-month high of 1.4 percent on an annual basis in May.
Food costs, which account for 14 percent of the basket, soared by 1.4 percent month-on-month in June, after increasing by 1.3 percent in the previous month.
Housing prices, the largest basket item with a 39 percent share, increased by 0.2 percent on a monthly basis in June after declining for six consecutive months as the property sector remains weak.
Oversupply continues to hurt the country's property market with 18,000 new homes expected to hit Dubai's market by the end of the year and rents in Abu Dhabi dropping 9 percent in the second quarter, reports showed. Transport costs were unchanged month-on-month in June.