Dubai July inflation edges lower, food prices slow
Housing costs dip, transport prices jump.
August 11, 2010 3:47 by Reuters
Dubai inflation slowed slightly in July to reach 0.4 percent year-on-year, the lowest level in three months, as food price growth decelerated and housing costs fell again, data showed on Wednesday.
Annual consumer prices in Dubai, one of the seven United Arab Emirates, fell 0.1 percent in April after a sharp tumble from record double digit price growth during 2008. The inflation rate picked up to 0.5 percent in June.
On the month, consumer prices rose 0.1 percent in July, down from a 0.2 rise in the previous month, the data from Dubai Statistics Center showed.
Prices in Dubai remained in positive territory for the third consecutive month on a monthly basis, following six months of declines.
“The inflation figures reflect the weak economic activity post the Dubai World debt crisis and a slow recovery going forward,” said Stuart Culverhouse, chief economist at Exotix in London.
The UAE, the world’s third largest crude exporter, and its fellow emirate Abu Dhabi have yet to release inflation data for July.
Dubai, which lacks the oil wealth of Abu Dhabi, took a big hit from the 2008 global financial crisis and its debt crisis late in 2009 has dragged down the overall UAE economy.
Prices for housing and energy, which have a 44 percent weight in the Dubai basket, fell by 0.1 percent month-on-month after staying flat in June.
Food prices, which account for 11 percent of the overall index, rose by 0.6 percent in July, the lowest increase in three months, following a 1.1 percent jump in June.
Transport prices, the third largest component, leaped 1.8 percent in July, after a 0.2 percent rise in June, the data showed.
Inflation in Abu Dhabi, which took a smaller hit from the global crisis despite oil output cuts, reached 3.4 percent year-on-year in June, while it stood at 0.9 percent for the whole UAE.
The data for the UAE and the individual emirates are not directly comparable as basket weights differ.
In a Reuters poll released in June, analysts expected UAE inflation of 1.8 percent this year and gross domestic product growth of 2.1 percent, the slowest rate in the Gulf.
(Reporting by Martina Fuchs, Editing by Martin Dokoupil/Ruth Pitchford)