Rising rents will push inflation in the UAE up in the first quarter of 2008 from last year’s 11 per cent average, said an analyst at the country’s Ministry of Economy.
“In the beginning of 2008 some political measures were taken to reduce prices of food but rents increased so the average will increase in the first quarter of 2008,” Mohamed Al Refai, a statistical analyst at the ministry charged with studying inflation in the UAE told Zawya Dow Jones.
The UAE Central Bank Governor Sultan bin Nasser Al Suwaidi said in Washington at the International Monetary Fund’s semi-annual meeting that the US dollar’s decline is making it harder for Gulf nations to control inflation.
The UAE and its neighbours, including Saudi Arabia, are under pressure to stop pegging their currencies to the dollar as it trades close to a record low against the euro after the Federal Reserve’s interest-rate cuts.
That is fuelling record inflation across the region as weaker currencies make imports more expensive.
“Policy making in some countries is being complicated by the depreciation of the dollar,” Al Suwaidi said. Strong growth in the region has “stoked inflationary pressures,” he said.
Rise in rents to push inflation in first quarter