The emirate recorded first full-year of deflation since 2007 after a rise of 0.5 per cent in 2011
On Wednesday Dubai Statistics Centre posted a consumer prices report. According to statistics to a drop in housing and utilities costs in 2012 caused deflation in consumer prices.
Since 2007, Dubai saw a full year of deflation for the first time in 2012. The report point out that after a 0.5% gain in 2011 consumer prices dropped by 1.7% a year later.
Housing and utilities cost declined by 6.5% in December. This caused a 1.9% drop in prices on a year over year basic. Consumers spend about 44% of their money for housing and utility expenses. Thought the cost fell yearly by 6.5% in December, they rose by rose 0.1% on month on month.
About 0.14% less money was given for communication expenses. The statistic also shows a 1.32% drop in clothing and footwear. Prices fell by 0.24% in the restaurants and hotels sector. Food prices account for 11% of the overall consumer expenses. Yearly they rose by 1%, but they saw a 1.3% monthly decline in December.
A rise of 3.24% was measured for the food and non-alcoholic beverages group. Alcohol and tobacco price also went up by 3%. Transportation prices rose by 1.34% and education climbed by 2.85%. Household equipment, routine household maintenance and furnishings gained 1.30%. Other inflation sectors are healthcare with 0.20% increase and recreations and culture group with 0.09%.
According to National Bureau of Statistics the inflation in UAE broke analysts’ expectations. The inflation level in 2011 was 0.9% and it eased to 0.7% a year later.
In the last month of 2012 the statistic bureau posted Consumer Price Index. The figure pointed out that in December the inflation went up by 0.6% on year over year basis.
The most important index of housing and utility costs fell by 1.1% yearly. The index was unchanged on month-on-month basis. Food prices account for about 14% of the index. The have climbed by 2% on year over year basis, though monthly falling by 0.2%.
Last week the UAE Minister for Economy – Sultan bin Saeed Al Mansouri commented the matter. He said that this year inflation in the Emirates should remain at steady levels of 1 to 1.5%. From 0.9 % in 2010 and 2011, inflation eased to 0.7% in 2012. This was the lowest level since Gulf economies were hit by Iraq’s invasion of Kuwait back in 1990.
In 2012 the economy of UAE is estimated to have grown by approximately 4% said the minister. The performance is better the one expected by the International Monetary Fund.
The minister also thinks that this growth tendency will continue in 2013.
In 2013 crude oil prices are forecasted to keep steady pace trading around $108 per barrel. According to analysts that will sustain the UAE’s growth as government spending increases.
In December the non-oil producing private sector in the Emirates further climbed up. This data is supported by the HSBC UAE Purchasing Managers’ Index. Input price inflation rate eased down hitting the lowest levels since September 2010. In December the wage inflation rate was slightly lower than November. At the same time average purchase prices increased stayed flat. General inflationary pressures and increased costs of living were the major drivers for the latest inflation.
