Abu Dhabi Inflation up 3.7% Driven by Transport Costs

Published June 25th, 2018 - 09:42 GMT
Across the UAE, inflation rose following the introduction of a five per cent VAT in January 2018. (Shutterstock)
Across the UAE, inflation rose following the introduction of a five per cent VAT in January 2018. (Shutterstock)

The Abu Dhabi consumer price inflation rate during the first five months of 2018 was 3.7 per cent compared with the same period of 2017, latest figures issued by the Statistics Centre Abu Dhabi (Scad) shows.

In the first five months of 2018, the consumer price index (CPI) rose to 111.9 per cent, up from 107.9 per cent during the same period of 2017, mostly driven by the higher cost of transport.



"On the other hand, a comparison of monthly price data reveals an increase of 3.2 per cent in consumer prices in May 2018 compared with May 2017. However, the CPI nudged down 0.4 per cent in May 2018 compared with the previous month," an Scad report said.

Across the UAE, inflation rose following the introduction of a five per cent VAT in January 2018, which pushed up annual CPI to 4.7 per cent year on year compared to 2.7 per cent in the previous month, Moody's Investor Service said.

"However, pass-through levels were lower than expected due to various exemptions and zero ratings while many retailers absorbed price hikes on their margins. We expect headline CPI growth will also be tempered by ongoing deflationary trends in the residential real estate market throughout the year," said Moody's.

Consumer inflation during the first five months of 2018 was driven mainly by the transport group, which increased by 10 per cent, contributing 37.9 per cent of the overall increase in the CPI.

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The report said another key contributor to the rise in consumer prices during the five-month period was the 'clothing and footwear' group, which accounted for 16.7 per cent of the overall increase in the CPI during the first five months of 2018 compared with the same period of 2017, reflecting a 12.1 per cent surge in the group's prices.

In addition, the 'miscellaneous goods and services' group contributed 15.5 per cent of the overall increase in the CPI for the first five months of 2018 compared with the same period of the previous year, as the prices of the group soared by eight per cent.

The report said the "housing, water, electricity, gas and fuel" group, on the other hand, detracted 30.8 per cent from the overall increase in the CPI during the first five months of 2018, reflecting a 3.3 per cent fall in house rents.

The Scad report shows a four per cent rise in consumer prices for citizen households during the first five months of 2018, compared with same period of 2017. The corresponding rises for non-citizen and share household types were 3.3 per cent and 3.7 per cent, respectively.

By Issac John


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