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Tue 17 Nov 2009 05:34 PM

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Abu Dhabi inflation falls to 20-year low

UPDATE 1: Statistics Centre - Abu Dhabi says rate for first 10 months of 2009 was below 1%.

Abu Dhabi's inflation rate over the first 10 months of 2009 has fallen to below one percent, its lowest in more than 20 years, the UAE capital's Statistics Centre said on Tuesday.

Statistics Centre - Abu Dhabi's (SCAD) report showed a steady drop during the year to the current rate of 0.98 percent, compared with 14.41 percent for 2008.

SCAD added: "The decline in inflation rate is forecast to continue, offering better opportunities for further growth and financial and economic stability in Abu Dhabi."

The report added that in the last four months (July-October), the emirate had seen a decrease in prices of most goods and services, compared with their previous year levels.

SCAD said the marked drop in the rate of inflation was "the result of stabilisation in the prices most major commodities and the decline in house rentals".

The consumer price index (CPI) for October retreated by 0.70 percent year-on-year, the report added.

"The decline in the rate of inflation in Abu Dhabi to less than 1 percent during the past 10 months is a positive and desirable phenomenon for the various segments of society and economic sectors, and does not necessarily indicate a deflation in the economy," the report said.

"It will boost the competitiveness of the local economy, attract more foreign investment, and encourage the establishment of new businesses," SCAD added.

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