Rent and food push up inflation in Abu Dhabi

Capital’s overall consumer price index up 2.54 per cent for first seven months

The Statistics Center of Abu Dhabi (Scad) has released its monthly report of the consumer price index for the month of July 2010, using the price data of 2007 as the base year. The bulletin reports CPI data according to the types and levels of welfare of households.

According to the report, the average rise in consumer prices for the first seven months of 2010 was 2.54 per cent, compared to the same period of 2009. This is evident from the advance in the CPI for the period January-July 2010 to 118.06 points, up from 115.14 points over the same period of 2009.

As the report reveals, the percentage year-over-year rise in the CPI for July 2010 was 2.75 per cent, as the index advanced from 115.76 points in July 2009 to 118.95 points in July 2010.

Meanwhile, the percentage month-to-month rise in the CPI for July 2010 compared to June 2010 was 0.40 per cent, as the index increased from 118.47 points in June 2010 to 118.95 points in July 2010.

Housing, water, electricity, gas and other fuels

As the report reveals, the "housing, water, electricity, gas and other fuels" group remained the largest contributor to the overall increase in prices during the first seven months of 2010, having accounted for 76.6 per cent of that increase.

This contribution resulted from a surge of 5.1 per cent in the prices of this group and due the group's sizeable 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 5.7 per cent in house rents, which make up 87.7 per cent of the total weight of the group.

The second highest contributor to the rise in consumer prices during the first seven months of 2010 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 report found that the education group accounted for 22.1 per cent of overall increase during the first seven months of 2010 compared to the same period of 2009, reflecting a surge of more than 20 per cent in education fees.

The transport group contributed 11.4 per cent to the year-over year rise in consumer prices for the periods compared as a result of an increase of 3.2 per cent in its component subgroups, namely, the transport services subgroup which advanced 4.8 per cent and the operation of personal transport equipment subgroup, whose prices grew by 3.9 per cent due to a rise in the spare parts and accessories of personal transport equipment by 1.6 per cent, in addition to an increase of 6.5 per cent in the prices of fuels, oils and lubricants.

Groups that showed a drop inprices

The prices of the bread and cereals subgroup declined by 9.2 per cent, oils and fats by 6.1 per cent, milk, cheese and eggs by 1.8 per cent and mineral waters, soft drinks, fruit and vegetable juices by 0.5 per cent.

Among the main groups that slowed down consumer prices during the first seven months of 2010 compared to the same period of 2009 was the clothing and footwear, group, which detracted 29.1 per cent from the overall rise in consumer prices.

The prices of this group retreated by 7.0 per cent as a result of a drop in the prices of the clothing and footwear subgroups by 5.6 per cent and 21.6 per cent, respectively between the period specified.

The same trend is observed in the communications group, which detracted 16.9 per cent from the overall increase in consumer prices during the period under review, owing to the drop in the prices of the telephone and telefax equipment and the telephone and telefax services subgroups by 12.7 per cent and 6.4 per cent, respectively.

Analysed by impact at the household welfare levels, the 2.54 per cent surge in consumer prices during the first seven months of 2010 compared with the same period in 2009 has led to an increase of 1.80 per cent in consumer prices for households of the bottom welfare quintile over the same period of comparison.

As for the other welfare levels, consumer prices grew by 2.42 per cent for households of top quintile and by 2.78per cent for the upper middle welfare quintile, the largest increase among the five welfare levels.

The report also illustrates that that overall 2.54 per cent rise in the year-over-year in consumer prices for the first seven months of 2010 has pushed up consumer prices for national households by 1.93 per cent, compared to 3.46 per cent for non-national households and 1.63 per cent for collective households.

As Scad's report elaborates, average consumer prices for the first seven months of 2010 increased by 2.54 per cent compared to the same period of 2009, as seen from the rise in the CPI for the first seven months of 2010 to 118.06 points, up from 115.14 points for the same period of 2009.

This rise in the prices reflects the net change in the consumer basket prices (resulting from upward and downward movement) during the two periods compared.

As Scad clarifies, an increase in the CPI does not necessarily imply higher prices for all the goods and services that make up the consumer basket, nor does it mean that all goods and services have increased by the same percentage (2.54 per cent); for there are goods and services whose prices have risen at rates above the overall rate (2.54 per cent) and others whose rate of increase was below the general average.

There are also goods and services whose prices have fallen.

However, the net change or the combined outcome of these changes (upward and downward movements) in the prices of the consumer basket during the first seven months of 2010 compared to the same period in 2009 produced an overall increase in prices by (2.54 per cent).

The report displays the relative changes in the prices of the major expenditure groups and the percentage contribution of each group to the overall change during the first seven months of 2010 compared with the same period in 2009.
 

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