Business | Markets
UAE expects price caps to be effective
Food and commodity inflation in the UAE should ease this year after the Gulf state imposed price controls, but global trends will continue to drive prices, the Ministry of Economy said yesterday.
- Reuters
- Published: 00:07 July 4, 2008
- Soaring food prices are a main driver of inflation across the world's biggest oil-exporting region, where most states, including the UAE, peg their currencies to the ailing dollar, which raises import costs.
- Image Credit: Gulf News Archive
Dubai: Food and commodity inflation in the UAE should ease this year after the Gulf state imposed price controls, but global trends will continue to drive prices, the Ministry of Economy said yesterday.
The ministry has signed agreements with a number of supermarket chains in the second-largest Arab economy this year to keep prices of several basic food items at 2007 levels after inflation hit a 20-year peak of 11.1 per cent last year.
The UAE also ordered a countrywide lifting of customs duties on cement and steel in March to stabilise construction costs.
"When it comes to food and commodities, there will be a positive impact on inflation from [these agreements]," Ministry under-secretary Mohammad Ahmad Bin Abdul Aziz Al Shihhi told reporters.
Food, beverage and tobacco prices rose 5.6 per cent last year, while rents jumped 17.5 per cent, according to official data released last month.
Asked if overall inflation would decline, Al Shihhi said: "Hopefully. But the trend globally doesn't look promising. It is too early to make a prediction now."
Out of control
"About 56 per cent of inflation last year was from rents, which is out of our control," he added.
Analysts said in May they expected UAE inflation to rise to 11.8 per cent this year.
Soaring food prices are a main driver of inflation across the world's biggest oil-exporting region, where most states, including the UAE, peg their currencies to the ailing dollar, which raises import costs.
The Ministry of Economy would soon unveil other measures to protect consumers from rising prices, but would continue with a no-subsidy policy, Al Shihhi added.
Share this article
More from Markets
More from Business
Popular in Business
-
XPRESS
Way to go this DSF
A fun-filled route to guide you to all the happening dos in town
Business Editor's choice
-
Tight security for air show
Police announce measures to keep people and property safe
-
Nokia aims for 300m customers by 2012
Core focus will be on messaging, maps and navigation, music and applications
-
Court orders freeze on all Saad assets
Many UAE banks exposed to troubled conglomerate
