Dubai Inflation rates in the UAE are expected to increase in the second half of 2012, according to a study by the Dubai Chamber of Commerce and Industry (DCCI) released Tuesday.
Recent public wage increases are likely to drive up demand, putting rising pressure on prices, the study said.
However, this will be tempered by a downward trend in international food prices shown by the IMF and the expectation of a stronger US dollar in the next 12 months, it said. Both factors are expected to reduce pressure on prices.
"With growth in bank credit and broad money still recovering, it is not expected that the monetary authorities will take any policy action. In fact, according to Central Bank officials, inflation is not a worry in the UAE since the sources of inflation are under control," the study said.
Some economists disagree with the Chamber's prediction on inflation trends this year.
"There's a strong co-relation between global oil prices and global inflation and consequently on the local inflation rate. Given the recent relative decrease in oil prices, accordingly there will not be a rise in the inflation rate this year," Dubai-based economist Irfan Al Hasani said.
