Dubai inflation slows to 4 per cent in 2009

Dubai: Dubai's inflation slowed to 4 per cent in 2009 from a peak of 10.8 per cent the previous year as price growth in housing and food costs decelerated, according to the latest data released by Dubai Statistics Centre on Wednesday.

The global economic downturn ended an oil and real estate-fuelled boom in the Gulf Arab region, slashing consumer price growth from 2008 record highs, with some countries such as the UAE or Qatar experiencing deflation in 2009.

Annual price growth in the key housing and energy item, which have a 44 per cent weight in the basket, fell to 2.4 per cent last year, from 5.6 per cent in 2008, the Dubai statistics office said.

Food prices, which account for 11 per cent of the overall index, edged up by 2.2 per cent, after jumping by 21.1 per cent in 2008, the data showed.

Education costs in Dubai saw the biggest rise last year with 18.6 per cent, little changed from the previous year.

Inflation in the whole UAE federation hit a nine-year low of 1.6 per cent last year due to a fall in the household category. This was after the household category touched a record high of 12.3 per cent in 2008.

Analysts expect price growth of 2.5 per cent this year.

The data for the UAE and Dubai are not directly comparable as their respective basket weights have been found to differ.

Reductions

The inflation rate in Dubai fell to 1.3 per cent in January, the lowest rate in at least a year. The decline was prompted by reductions in the cost of food and drinks.

Inflation slowed from 2.8 per cent in December. The rate is the lowest since annual inflation data records began in 2009.

The cost of food and non-alcoholic drinks dropped an annual 2.3 per cent in January, compared with a decline of 2 per cent in December, while the cost of housing electricity and water rose 1.5 per cent.

Communication costs declined 7.8 per cent.

— With input from agencies