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Inflation in UAE rises to 0.73%

Food and beverages components post a rise

Gulf News

Dubai: Annual inflation in the UAE rose to 0.73 per cent in February, up from 0.43 per cent in January, mainly due to higher food and beverage prices, according to the country’s national bureau of statistics.

The overall consumer price index, or CPI, reached 117.24 in February, up from 116.39 in the year before period, the agency said in an emailed statement on Sunday.

While the food and beverages components posted a rise, the increase was mitigated somewhat by a slight fall in housing prices, data showed. The housing category makes up nearly 40 per cent of the UAE’s CPI basket.

UAE’s economy minister in January said he expects inflation to range between 1 per cent and 1.5 per cent this year.

Inflation in the UAE has remained subdued in the past few months, but a strengthening economy is expected to boost demand — especially in the housing sector, which may eventually lead to higher inflation, some analysts say.

“The UAE economy started 2013 in good shape,” Standard Chartered said in a note on Sunday. “First, government spending out of Abu Dhabi is strong, with the emirate outlining strong medium-term spending plans. Second, Dubai’s economy is firmly on track, with the core trade and services sectors well placed to benefit from strong regional trade currents, underpinned by high levels of GCC government spending in 2013.”