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Abu Dhabi CPI hits at least 21-mth high in Sept
Inflation 3.8 pct y/y in Sept vs 3.6 pct in Aug; Consumer prices +1.0 pct m/m vs +0.8 pct in Aug; Food, housing, transport costs rise.
October 24, 2010 3:32 by Reuters
Abu Dhabi’s annual inflation rate edged up to 3.8 percent in September, its highest since at least the beginning of 2009, as key living costs rose helped by one-off impacts, data from the Gulf Arab emirate showed on Sunday.
Consumer prices in Abu Dhabi, the oil-producing member of the United Arab Emirates, started to accelerate in December after five months of declines as the economy picked up.
Inflation in Abu Dhabi, which has 10 percent of the world’s oil reserves and accounts for more than 60 percent of the UAE economy, stood at 3.6 percent in August. It climbed to a record high of 14.9 percent in the oil-boom year of 2008.
On the month, Abu Dhabi consumer prices jumped 1.0 percent in September, the fastest pace in 14 months, up from a 0.8 percent rise in the previous month, data from Abu Dhabi Statistics Centre (SCAD) showed.
“Overall, the numbers do not indicate any sort of spike up,” said Giyas Gokkent, head of research at the National Bank of Abu Dhabi. “We are still on course to have relatively limited single-digit inflation.”
The United Arab Emirates, the world’s third-largest oil exporter, has yet to release inflation data for September. The data for individual emirates and the UAE are not directly comparable as basket weights differ.
In Abu Dhabi, food prices, which account for 16 percent of the consumer price basket, rose 0.9 percent month-on-month, slightly down from a 1.3 percent jump in August.
Food prices usually soar during the holy month of Ramadan, which ended in mid-September, as people enjoy more elaborate evening meals after the daylight fasting.
Housing costs, the largest item in the basket, grew 0.6 percent in September, after staying flat for two months in a row, while transport costs shot up by 2.9 percent on a fuel price increase, the data showed.
“In terms of rents, that is probably in part explained by the methodology in calculating the CPI here,” Gokkent said.
“The weight is given much more to existing contracts and those are protected by rent hike caps, that is why you might still continue to see an increase in the rent component of CPI here even though new contracts continue to come down,” he said.
A Reuters poll saw UAE inflation at 1.5 percent this year. Price growth fell to a nine-year low of 1.6 percent in 2009 as the global crunch hit the oil and trade-based economy, after a record peak of 12.3 percent in 2008.
(Reporting by Martin Dokoupil, editing by Miral Fahmy)