x Abu Dhabi, UAEMonday 24 July 2017

Rising food prices push up Abu Dhabi inflation

Abu Dhabi inflation rate inches up to 2.2 per cent in December as vegetable and other food items become more expensive.

Rising prices of vegetables, coffee and other foods helped to lift Abu Dhabi’s year-on-year inflation rate to 2.2 per cent in December, according to the Statistics Centre–Abu Dhabi (Scad).

That marks an increase of almost half a percentage point from November, when the year-on-year inflation rate was 1.8 per cent, according to Scad.

Last month, prices for food and non-alcoholic beverages increased 4.6 per cent from a year earlier, restaurants and hotels 3.7 per cent, and clothing and footwear 3.3 per cent. Housing, water, electricity, gas and other fuels, which have a 38 per cent weighting in the index, advanced 1.5 per cent.

Rises in housing and rental prices last year still do not appear to be fully reflected in the official data, economists have pointed out. Rental rates for mid-range villas and apartments are believed to have risen 20 to 30 per cent in the first nine months of the year compared to the year-earlier ­period.

In November, Abu Dhabi removed a rental cap of 5 per cent on properties, allowing landlords to raise prices sharply on many older properties that had been leased at rates unrepresentative of the broader market.

Inflation has remained weak since the global financial crisis tightened the availability of credit and hammered the property market. But house prices rebounded sharply last year as confidence returned and stalled projects restarted.

Consumer prices for all of 2013 rose 1.3 per cent from 2012, Scad said, bolstered by rising food and non-alcoholic beverage prices. Vegetable prices gained 9.1 per cent, coffee and cocoa 6.4 per cent, fish and seafood 3.7 per cent and fruit 2.4 per cent.

Analysts polled by Reuters in September forecast average inflation in the UAE would rise to 1.5 per cent in 2013 and 2.3 per cent this year from 0.7 per cent in 2012, the lowest level since 1990.

mkassem@thenational.ae