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25 June 2024

Dubai inflation at 4-year low

By Staff

A steady fall in rents allied with a plunge in education costs to depress inflation in Dubai to its lowest level of 0.52 per cent in four years despite increases in most components of the consumer price index.

Official data showed housing, water, electricity, gas and other fuels dipped by around 3.3 per cent in 2011 compared with a1.25 per cent fall in 2010 after a 2.4 per cent rise in 2009 and much higher increases in the previous year.

The decline, part of a general post-crisis property downturn in the region, was the main factor for the lower inflation rate given the high share of that sector in the CPI, accounting for 43.7 pert cent, according to a new report by the Dubai Statistics Centre (DSC).

Last year’s inflation rate was the lowest in four years as it stood at 0.55 per cent in 2010 and 4.03 per cent in 2010.

DSC gave no figures for 2008 but inflation in Dubai and other parts of the UAE and the Gulf suffered from record high inflation levels because of a surge in rents and food prices, strong domestic demand and a weakening in the US dollar, to which most regional currencies are pegged.

The report showed education inflation tumbled to 2.87 per cent in 2011 from 9.04 per cent in 2010 and as high as 18.6 per cent in 2009.

Clothing and footwear deflated by 1.81 per cent after rising by around 0.44 per cent in 2010 and as high as 9.86 per cent in 2009.
Transport also recorded a lower rate of 5.43 per cent compared with 6.64 per cent.

Most other sectors recorded a rise, with food and non-alcoholic beverages growing by 5.22 per cent last year compared with 1.9 per cent in 2010.

Furnishing and household equipment inflated by 3.46 per cent compared with 1.1 per cent while communications edging up by 0.71 per cent after receding by nearly 10.59 pr cent in 2010.

Restaurants and hotels swelled by 4.47 per cent last year compared with 1.43 per cent in 2010, reflecting a recovery in tourism and business in Dubai.

The report showed miscellaneous goods and services rose by 2.56 per cent last year compared with 2.09 per cent in 2010.