| Kippreport.com

UAE could see deflation soon

August 12, 2009 3:22 by Aarti Nagraj

Inflation in the UAE could soon turn negative because of reducing housing prices in the country, according to Deutsche Bank. Inflation fell from 12.3 percent last year, to 3.4 percent in the first half of 2009 till June.

“Our expectation of further declines in real estate prices would drag the housing component lower and a widening output gap will keep price pressures subdued more generally,” said Deutsche Bank economist Caroline Grady, adding “Headline inflation has declined sharply (year-to-date) and looks set to slip into negative territory.”

Tags: deflation, house prices, inflation, UAE