Abu Dhabi: UAE inflation rose by 0.53 per cent compared to its August level, new government statistics revealed yesterday.
The overall Consumer Price Index (CPI) for the UAE reached 115.07 in August 2010 compared to the base year 2007.
"Inflation increased by 0.53 per cent compared to its value at the end of July 2010, and by 0.90 per cent compared to its value at the end of August 2009. At the same time, it increased by 0.54 per cent for the first eight months of 2010 compared to its value at the end of the first eight months of 2009," according to a report by the Statistics Centre Abu Dhabi (SCAD).
Highest
The report shows that CPI in recreation and culture went up the highest at 4.41 per cent, while spending in food and soft drinks rose by 1.97 per cent as a result of Ramadan.
Meanwhile, expenditure on furniture and household goods grew by 1.08 per cent. The CPI also found increases in several other major expenditure groups including communications (+0.80 per cent), transportation (+0.61 per cent) and beverages and tobacco (+0.27 per cent).
Significant
Simon Williams, chief economist at HSBC, said: "I don't think these latest figures represent a significant increase [in inflation] nor do I think they indicate the start of an upward trend in the UAE. "Growth remains too weak and there is still too much spare capacity to create any kind of significant side pressures."
Abu Dhabi recorded the highest growth in CPI, rising by 0.81 per cent, followed by Dubai, which recorded a growth of 0.59 per cent. Abu Dhabi's annual inflation rate reached 3.6 per cent in August; its highest growth in at least 20 months.
Mohammad Al Asoomi, a UAE-based economist, said: "Data collected from previous surveys give weights that allows us to average the prices to form the consumer price index.
"Rents have stabilised, which was the main reason for inflation in Abu Dhabi. Next year, I think inflation will stabilise around the same level."
