Dubai’s CPI inflation brakes to 1.9% y/y in January

By bne IntelliNews February 19, 2016

Falling transport, clothing and tobacco prices, coupled with slower housing and food price growth, cut Dubai’s CPI inflation to 1.9% y/y in January from a 3.1% annual rise the month before, according to data released by the statistics office.

Housing costs, which make up 44% of the CPI basket, rose a mild 0.5% m/m in January, cutting the annual growth to 4.4% from 5.6% y/y in December last year. The reading remains mainly underpinned by soaring rents and low prior-year base. Rent prices will keep rising in the near term amid strong expats demand.

Food and non-alcoholic prices (11% of the index) dropped 1.9% m/m in January on favourable seasonal factors and lower imported inflation, reducing the annual growth to 3.1% from 3.3% in December.

Transport costs (9.08% of the index) also shrank 2.7% m/m widening the annual deflation to 4.1% from 1.6% y/y in December. The federal government liberalized the fuel prices in August last year to cut the budget deficit.

Clothing and footwear charges dropped 4.8% y/y, the same as in December.

Education prices grew 4.8% y/y in January, the same a month earlier.

In 2015, Dubai’s CPI inflation averaged 4%. The reading, which bodes well with government efforts to curb rising inflationary pressures amid soaring public spending and consumer demand, was kept anchored by falling energy prices and related imported inflation. The pattern will keep the CPI inflation well anchored in the near term.

Related Articles

UAE to buy major stakes in Kazakh special economic zones

The United Arab Emirates’ (UAE’s) global port operator Dubai Ports World on March 24 signed two framework agreements to acquire stakes in Kazakhstan’s two Special Economic ... more

Survival of Iran nuclear deal appears far less likely under US Secretary of State Mike Pompeo

The odds on the Trump administration attempting to kill the Iran nuclear deal substantially shortened on March 13 with the firing-by-tweet of US Secretary of State Rex Tillerson and his replacement ... more

Billion-dollar petrochemical facility to be built in Turkey by Algeria's Sonatrach

Algerian national energy company Sonatrach has struck a deal with Turkey's Ronesans and Bayegan to build a petrochemical plant worth $1bn in Turkey, Turkish President Recep Tayyip Erdogan said on ... more

Dismiss