Dubai: Consumers in the UAE can expect their household spending to double this year compared to a year ago, although prices are expected to ease in the last quarter of 2015.
According to calculations by a senior economist at a local bank, increases in the costs of good and services will average 4.37 per cent this year, up from 2.34 per cent in 2014.
Since the beginning of the year, the overall cost of living in Dubai and the rest of the emirates has largely been on the rise, with many consumers spending more out of their pockets on rent, transportation, utilities, food, education and other essentials.
The UAE’s consumer price index, which reflects the changes in the cost of goods and services, rose from 3.67 per cent in January to 4.94 per cent in August.
Alp Eke, senior economist at the National Bank of Abu Dhabi, however, said he expects consumer prices to ease towards the end of the year, with the inflation in September forecast to average at 4.85 per cent.
The monthly inflation is expected to drop further to 4.6 per cent in November and 4.5 per cent in December, according to calculations by Alp Eke, senior economist at the National Bank of Abu Dhabi (NBAD).
“The prices are supposed to decline. Petrol prices have been reduced for October and rents are falling. September 2015 figures are not yet available. In my opinion, 2015 average for inflation is going to be 4.4 per cent,” Eke told Gulf News.
The average inflation for the year will still be much higher than last year.
Housing rents in Dubai, which eat a huge portion of most residents’ monthly budgets, have been mostly on a decline, although increasingly popular areas are still posting significant rental increases.
Following the government’s move to remove oil subsidies, the costs of petrol for October have been slashed by 8 per cent to 8.9 per cent. Diesel prices, however, have gone up by 1.6 per cent.