Study to modify price index

Abu Dhabi will use the findings of a household spending survey this year to modify an outdated consumer price index to more accurately calculate inflation, a government official said yesterday. Abu Dhabi, the world's fifth-largest oil exporter, will begin calculating price rises based on the new index in the fourth quarter, said Butti Ahmed Al Qubaisi, assistant under-secretary for the Department of Planning and Economy. Inflation in Abu Dhabi hit 11.7 per cent in 2007 and held at 11.5 per cent in March, official data showed this month. In July, the UAE capital will open a statistics centre to compile regular economic and social data, said Qubaisi. "It is very important to give a clear road map for decision-makers. We are trying to build a statistics culture," Qubaisi told reporters. The second-largest Arab economy released its federal 2007 inflation data only last week, showing price rose 11.1 per cent, their fastest pace in at least 20 years. "We need to give decision-makers a clearer picture, not a foggy one," Qubaisi said. Abu Dhabi's current consumer price index is based on data from a 1997 survey of household spending habits, he said. A new index is being devised based on a year-long household expenditure and income survey, concluded in March, that collected data on spending habits of Emirati and non-Emirati families in Abu Dhabi, he said. "The changes in spending have been considerable since 1997. We will base the new basket on the new survey," he said. The new survey showed rents and energy accounted for 34.46 per cent of a resident's monthly expenses, followed by transportation and telecommunications at 19.59 per cent, and food and beverage costs at 14.91 per cent. The department is conducting seven economic and five social surveys this year, including surveys of the industrial sector, the construction sector, wholesale and retail, transport and banks, Qubaisi added. "The economic surveys will monitor the growth in the economy and the results will be used to give a complete picture of Abu Dhabi's GDP," Qubaisi said. The Abu Dhabi Statistics Centre, meanwhile, will work with the Ministry of Economy and the International Monetary Fund to improve the flow of national economic indicators, said the assistant under-secretary. The economy ministry said last week it planned to modify its consumer price index to reflect price trends more accurately and release data monthly beginning next year.