Arab Today, arab today uae consumer price index remains high
Last Updated : GMT 15:40:14
Arab Today, arab today
Arab Today, arab today

UAE consumer price index remains high

Arab Today, arab today

Arab Today, arab today UAE consumer price index remains high

Consumer price index
Dubai - Arab Today

Although the prices of essential commodities in the UAE have gone down due to a drop in oil prices worldwide, there has been a definite spike in the Consumer Price Index (CPI) due to the escalation in housing and utilities, Dubai-based economist Cedwyn Fernandes points out.

Professor Fernandes, an economist and Acting Director at Middlesex University Dubai, said that while there was only a modest increase in the overall inflation rate of 2.21 per cent from December 2014 to February 2015 in Dubai, the rise in the Consumer Price Index (CPI) was still quite high.

"This is because housing and utilities have increased by 5.46 per cent in just three months and a total increase of 7.17 per cent since February 2014. This has had a significant impact on the consumer, as housing and utilities have a weight of 43.70 in the CPI,” he said.

Listing several causes for the rise in inflation in the UAE, he attempted to analyse how a rise in housing and utilities impacts the overall CPI. The UAE imports most of its consumer goods including food, and the world prices of these goods have a direct impact on inflation.

"The Food and Agriculture Organisation (FAO) Index and oil prices are a good indicator of the direction of world prices. The overall inflation rate over the past three months has been a modest 2.21 per cent in the UAE as food prices have declined by 1.47 per cent,” he said.

This was mainly due to the decline in world food prices as indicated by the FAO Index, falling 3.4 per cent in the past three months and a whopping decline of 14 per cent since February 2014, he added.

"Oil prices have fallen by more than 50 per cent since summer of 2014. The decline in commodity prices has had a positive impact on inflation.”

However, housing and utilities bills are not controlled by falling oil prices and a rise in these continues to impact the overall CPI.

Fernandes said that other factors that play a significant role in the causes of inflation are linked to domestic factors in the form of non-tradable goods.

"If the domestic price of any tradable good increases due to a short-term shortage, the good can be quickly imported as UAE is an open economy. If a good is selling significantly more domestically than its international price, imports will go up and domestic prices will be in line with international prices,” he said.

However, for non-tradable goods like housing, it is not possible and, until the domestic supply of housing units catches up with demand, prices as reflected by rentals will keep increasing.

Fernandes predicts that this time around, as compared to 2006 and 2007, the prognosis for inflation in the UAE is good.

He said that the strength of the US dollar and fall in world commodities and oil prices have had a dampening effect on inflation.
Source: Gulf News

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today uae consumer price index remains high Arab Today, arab today uae consumer price index remains high

 



Arab Today, arab today
Arab Today, arab today Hats, scarves add beauty to women

GMT 19:10 2017 Friday ,17 February

Hats, scarves add beauty to women
Arab Today, arab today Tourist guide reveals methods of tourist attractions

GMT 17:46 2017 Saturday ,18 February

Tourist guide reveals methods of tourist attractions
Arab Today, arab today To release new antiques collection

GMT 20:33 2017 Friday ,17 February

To release new antiques collection
Arab Today, arab today Air raid kills eight women, child

GMT 06:42 2017 Friday ,17 February

Air raid kills eight women, child
Arab Today, arab today Murder of 2 reporters in Dominican Republic

GMT 22:45 2017 Thursday ,16 February

Murder of 2 reporters in Dominican Republic

GMT 20:02 2017 Saturday ,18 February

Gold edges higher as global equities lose momentum

GMT 10:20 2017 Thursday ,16 February

New Zealand's Spark rings up interim profit rise

GMT 05:40 2017 Thursday ,16 February

Stocks rise on Yellen’s positive US outlook

GMT 05:34 2017 Thursday ,16 February

‘Protectionism, populism threaten euro zone’

GMT 04:51 2017 Thursday ,16 February

Oil pulls back after brief rally
View News in Arabic - Business: نفط وبتروكيماويات
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Kidogo provides childcare for underserved

GMT 20:24 2017 Wednesday ,15 February

Kidogo provides childcare for underserved
Arab Today, arab today Tragic fluctuations of Bakhtiari's life revealed

GMT 06:50 2017 Wednesday ,15 February

Tragic fluctuations of Bakhtiari's life revealed
Arab Today, arab today London to tax old cars

GMT 14:06 2017 Friday ,17 February

London to tax old cars
Arab Today, arab today Pluto's unruly moons

GMT 06:31 2015 Thursday ,04 June

Pluto's unruly moons
Arab Today, arab today Competes Sweden and Germans by S90

GMT 22:36 2017 Thursday ,16 February

Competes Sweden and Germans by S90
Arab Today, arab today Porsche reveals new 2018 Panamera

GMT 17:31 2017 Wednesday ,15 February

Porsche reveals new 2018 Panamera
Arab Today, arab today Actress Nadeen Al Rassi views art as her entity

GMT 07:30 2017 Saturday ,18 February

Actress Nadeen Al Rassi views art as her entity
Arab Today, arab today Teach monkeys to recognize themselves in mirror

GMT 20:41 2017 Wednesday ,15 February

Teach monkeys to recognize themselves in mirror

GMT 07:05 2017 Friday ,17 February

Singer Diana Karzon will issue a new album soon

GMT 06:40 2017 Friday ,10 February

MP calls for removing text from Islamic story

GMT 13:16 2017 Tuesday ,14 February

First fashion model with Down syndrome

GMT 10:26 2017 Tuesday ,14 February

Emergency UN meeting in Harare

GMT 14:04 2017 Tuesday ,14 February

"Lagom" new Swedish concept in interior design

GMT 12:07 2017 Thursday ,16 February

Bite-mimicking malaria vaccine

GMT 09:03 2017 Thursday ,16 February

Tour guide praises women’s beaches

GMT 13:12 2015 Saturday ,09 May

Sheikh Sultan opens Sharjah Centre

GMT 15:16 2017 Sunday ,19 February

Apple to start India operations with iPhone SE

GMT 21:42 2017 Sunday ,12 February

Rania al-Ghazali designs candles of bubbles
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday