Abu Dhabi inflation down on lower food prices
Abu Dhabi's annual inflation slowed to 3.3 per cent in December, its lowest level in six months, as food prices dropped for the first time since at least June, data showed on Tuesday.
Inflation in the emirate, which accounts for 10 per cent of the world's oil reserves and more than 60 per cent of the UAE economy, had been going up last year, peaking at 4.1 per cent in October and November. Price growth accelerated to 3.1 per cent in the whole of 2010, from a mere 0.8 per cent in the previous year, but remained far below 14.9 per cent reached at the height of an oil-led boom in 2008, data from Abu Dhabi Statistics Centre (SCAD) showed.
On a monthly basis, December consumer prices dropped 0.8 per cent, after a 0.2 per cent rise in the previous month.
"The monthly decline of food prices in December is likely to be an exception. This is just a one-off on the radar," said Giyas Gokkent, chief economist at National Bank of Abu Dhabi.
"What will happen in 2011 is a pick-up in food prices due to a rise in global commodities prices," he said.
Food prices, which account for more than 16 per cent of the basket, fell 1.9 per cent month-on-month in December after a 0.9 per cent increase in the previous month.
Inflation in Dubai edged up slightly in November to 0.5 per cent year-on-year. The UAE and Dubai have yet to release December consumer price data.
In a Reuters poll in December, analysts had forecast UAE inflation of 1.2 per cent in 2010 and 2.8 per cent this year.
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