Abu Dhabi to overhaul outdated inflation measure

CPI OVERHAUL: Abu Dhabi has said it will use the results of this year's household spending survey to modify its inflation measure. (Getty Images)

Abu Dhabi will use the findings of a household spending survey this year to modify an outdated consumer price index to more accurately calculate inflation, a government official said on Monday.

Abu Dhabi, the world's fifth-largest oil exporter, will begin calculating price rises based on the new index in the fourth quarter, said Butti Ahmed Al-Qubaisi, assistant under-secretary for the Department of Planning and Economy.

Inflation in Abu Dhabi hit 11.7 percent in 2007 and held at 11.5 percent in March, official data showed this month.

In July, the UAE capital will open a statistics centre to compile regular economic and social data, Al-Qubaisi told reporters.

"It is very important to give a clear road map for decision-makers. We are trying to build a statistics culture," Al-Qubaisi said.

Economic indicators are sparse in the UAE, one of six states that make up the GCC, the world's biggest oil-exporting region.

The second-largest Arab economy released its federal 2007 inflation data only last week, showing price rose 11.1 percent, their fastest pace in at least 20 years.

"We need to give decision-makers a clearer picture, not a foggy one," Al-Qubaisi said.

Abu Dhabi's current consumer price index is based on data from a 1997 survey of household spending habits, Al-Qubaisi said.

A new index is being devised based on a year-long household expenditure and income survey, concluded in March, that collected data on spending habits of Emirati and non-Emirati families in Abu Dhabi, he said.

"The changes in spending have been considerable since 1997. We will base the new basket on the new survey," he said.

The new survey showed rents and energy accounted for 34.46 percent of a resident's monthly expenses, followed by transportation and telecommunications at 19.59 percent, and food and beverage costs at 14.91 percent.

The department is conducting seven economic and five social surveys this year, including surveys of the industrial sector, the construction sector, wholesale and retail, transport and banks, Al-Qubaisi added.

"The economic surveys will monitor the growth in the economy and be used to give a complete picture of Abu Dhabi's GDP," Al-Qubaisi said.

The Abu Dhabi Statistics Centre, meanwhile, will work with the Ministry of Economy and the International Monetary Fund (IMF) to improve the flow of national economic indicators, he added.

The Economy Ministry said last week it planned to modify its consumer price index to reflect price trends more accurately and release data monthly beginning next year.

Access to regular inflation data would make it easier to do business in the UAE, a key regional commercial centre, Peter Riddoch, chief executive of Dubai real estate developer Damac, said last week. (Reuters)

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