The inflation rate in the UAE fell to below 1 per cent for the first time this year.
Inflation in the second-largest economy after Saudi Arabia slowed to 0.6 per cent last month, from 1.3 per cent in July, according to the National Bureau of Statistics.
The muted inflationary environment represents a turnaround from 2007 and 2008, when a property market boom and high credit growth pushed inflation to double-digit levels.
Helping to keep the overall inflation rate in check were accommodation costs, which dropped to 0.74 per cent last month compared with July.
Housing costs have the biggest weighting in the index.
Weakness in the housing market have pushed prices down by more than half from their peaks before the global downturn.
Oversupply may mean prices slip further.
In contrast, food prices rose by 0.49 per cent last month, which coincided with the holy month of Ramadan, a period of fasting.
The increase comes despite attempts by the Government to cap prices.
The Ministry of Economy agreed with retailers, including Carrefour, Lulu Hypermarkets and Spinneys, in May to fix the prices of 400 commodities at 70 outlets in various emirates until the end of the year.
Its action was in response to global food prices hitting near record highs this year.
It also called on retailers to offer discounts of up to 50 per cent during Ramadan.
Transportation costs, accounting for the third-largest weighting on the index, increased 0.01 per cent from July.
A consensus of analyst estimates polled by Reuters expected average inflation of 2.5 per cent this year after 0.9 per cent last year.
The IMF forecasts an inflation rate of 4.5 per cent for the year.