Abu Dhabi inflation rate up 2.67% in eight months

Housing, water, electricity, gas and other fuels group largest contributors to overall rise in prices

The average rise in consumer prices for the first eight months of 2010 was 2.67 per cent, compared to the same period of 2009, according to the monthly report of Statistics Centre - Abu Dhabi (Scad) released on Monday.

The Consumer Price Index (CPI) report for the month of August used the price data of 2007 as the base year.

The increase is evident from the advance in the CPI for the period January-August to 118.29 points, up from 115.22 points over the same period of 2009.

The report reveals the percentage monthly year-over-year rise in the CPI for August was 3.59 per cent, as the index advanced from 115.75 points in August 2009 to 119.91 points in August 2010.

Meanwhile, the percentage month-to-month rise in the CPI for August compared to July was 0.81 per cent, as the index increased from 118. 95 points in July to 119.91 points in August.

Analysed by its impact at the household welfare levels, the 2.67 per cent surge in consumer prices during the first eight months of the year compared with the same period in 2009 has led to an increase of 2.02 per cent in consumer prices for households of the bottom welfare quintile.

Over the same period, consumer prices grew by 2.51 per cent for households of top quintile and by 2.92 per cent for the upper middle welfare quintile, the largest increase among the five welfare levels.

The report also illustrates that that overall 2.67 per cent rise in the year-over-year in consumer prices for the first eight months of 2010 has pushed up consumer prices for national households by 2.13 per cent, compared to 3.51 per cent for non-national households and 1.81 per cent for collective households.

There are also goods and services whose prices have fallen.

Scad's report reveals that the housing, water, electricity, gas and other fuels group remained the largest contributor to the overall increase in prices during the first eight months, having accounted for 70.4 per cent of that increase.

This contribution resulted from a surge of 4.9 per cent as seen from the rise of 4.9 per cent in the prices of this group and due the group's sizable weight, which constitutes 37.9 per cent of the total weight of all expenditure groups. The main cause underlying the increase in the average price of this group was a rise of 5.5 per cent in house rents, which make up 87.7 per cent of the total weight of the group.

The second largest contributor to the rise in consumer prices during the first seven months compared with the same period in 2009 was the food and non-alcoholic beverages group, which accounted for 30.2 per cent of the rise in the index, due to increases in the prices of most of the subgroups falling under this group, namely sugar, jam, honey, chocolate and confectionery, which surged 35.4 per cent, while meat prices grew by 11.2 per cent, vegetables by 9.1 per cent, fish and seafood by 4.7 per cent foods not elsewhere classified by 3.8 per cent, coffee, tea and cocoa by 2.7 per cent and fruits by 1.8 per cent.

The next highest contributor to the overall year-over-year increase in the CPI over the first eight months was the food and non-alcoholic beverages group, which accounted for 31.2 per cent of the rise in the index, due to increases in the prices of most of the subgroups falling under this group, namely sugar, jam, honey, chocolate and confectionery, which surged 33.73 per cent, while meat prices grew by 11.6 per cent, vegetables by 9.5 per cent, fish and seafood by 4.8 per cent, foods not elsewhere classified by 4.4 per cent and coffee, tea and cocoa and fruits by 2.7 per cent each.

On the other hand, the prices of the bread and cereals subgroup declined by 8.1 per cent, oils and fats by 5.9 per cent, milk, cheese and eggs by 1.3 per cent and mineral waters, soft drinks, fruit and vegetable juices by 0.5 per cent.

The education group accounted for 21.0 per cent of overall increase occurring during the first eight months of 2010 compared to the same period of 2009, while the transport group contributed 13.1 per cent to the year-over year rise in consumer prices for the periods compared, as a result of an increase of 3.8 per cent in its component subgroups, namely, the transport services subgroup which advanced 4.0 per cent and the operation of personal transport equipment subgroup, whose prices grew by 1.5 per cent due to a rise in the spare parts and accessories of personal transport equipment by 8.0 per cent, in addition to an increase of 4.2 per cent in the prices of the group other services related to personal transport equipment.

Among the main groups that slowed down consumer prices during the first eight months of 2010 compared to the same period of 2009 was the clothing and footwear, group, which detracted 28.2 per cent from the overall rise in consumer prices. The prices of this group retreated by 7.2 per cent as a result of a drop in the prices of the clothing and footwear subgroups by 5.7 per cent and 22.7 per cent, respectively, during the period specified.

The communications group detracted 14.1 per cent from the overall increase in consumer prices during the period under review, owing to a drop of 5.6 per cent in the prices of this group, due to a decline of in the price of the telephone and telefax equipment and the telephone and telefax services subgroups by 13.53 per cent and 5.7 per cent, respectively.

Drawing a year-over-year comparison of August price levels, the report finds that average consumer prices advanced 3.59 per cent in August 2010 compared to August 2009, as the CPI accelerated to 119.91 points in August 2010, up from 115.75 points in August 2009, reflecting the net price movements during the two months under comparison.

According to the report, the largest rise in prices during August 2010 compared to August 2009 was in the education group which advanced 20.1 per cent, followed by the transport group, which surged 8.4 per cent, the food and non-alcoholic beverages group, which rose 8.1 per cent.

On the other hand, the clothing and footwear group retreated by 8.4 per cent and the communication group by 0.2 per cent due to a decline of 9.6 per cent in the prices of mail services and a fall of 19.9 per cent in the prices of telephone and telefax equipment.

Scad’s reports reveals a rise of 0.81 per cent in the CPI for August 2010 compared to July 2010, as the CPI advanced from 118.95 points in July 2010 to 119.91 points in August 2010.

The key expenditure groups that showed observable increases during the month of August 2010 compared to July 2010 include the communication group, which surged by 12.6 per cent, and the food and non-alcoholic beverages group, whose prices grew 1.3 per cent, due to rises in some of its subgroups, namely vegetables by 8.7 per cent and meat by 3.0 per cent.

Despite the overall 0.81 per cent rise the consumer price index for August 2010 compared to July 2010, the prices of the clothing and footwear group and those of the miscellaneous goods and services group retreated by 1.6 per cent and 0.4 per cent, respectively, while other groups generally remained unchanged when their price levels for August 2010 are compared with those of July 2010.

Elaborating on the impact of the CPI movement on different welfare levels, the report shows that the rise in consumer prices during the first eight months of 2010 by 2.67 per cent above their levels over the same period in 2009 resulted in a surge of 2.02 per cent in consumer prices for households of the bottom welfare quintile for the same period of comparison. The corresponding rise for other welfare levels was 2.51 per cent for households of the top quintile and 2.92 per cent for the upper middle quintile, which experienced the largest increase among the five welfare levels.

The corresponding rises produced by the overall 3.59 per cent increase in consumer prices during the month of August 2010 compared to August 2009 were 3.59 per cent for the bottom welfare level, 3.11 per cent for the top welfare level and 3.88 per cent for the upper middle welfare quintile.

The report also details the impact on different welfare levels produced by the 0.81 per cent increase in consumer prices during the month of August 2010 compared to July 2010, which implied a rise of 1.72 per cent in consumer prices for the bottom quintile, but affected the lower middle, the middle and upper middle welfare quintiles as a rises of 1.18 per cent, 0.92 per cent and 0.80per cent in consumer prices for the said welfare levels. The corresponding rise for the top quintiles, however, was 0.53 per cent, i.e. the uppermost level felt the rise the least, while the lowest welfare quintile was the hit the hardest.

Analysed by impact according to household type, the overall 3.59 per cent rise in consumer prices during August 2010 as compared to August 2009 resulted a surge of 3.48 per cent in August 2010 consumer prices for national households, compared to corresponding rises of 3.83 per cent and 3.09 per cent for non-national and collective households, respectively.

Finally, a breakdown by household type of the 0.81 per cent rise in consumer prices for August 2010 compared with July 2010 reveals an increase of 0.73 per cent in consumer prices for the national households segment, while the corresponding rises for non-national and collective households were 0.64 per cent and 1.99 per cent, respectively.

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