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Tue 26 Jan 2010 07:08 AM

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Abu Dhabi inflation rate falls to 0.78% in 2009

Latest data reveals lowest level on record amid global economic downturn.

Abu Dhabi's inflation rate fell to a new low of 0.78 percent in 2009, the lowest on record, Statistics Centre Abu Dhabi (SCAD) said in a report on Monday.

The annual rate is lowest on record for the emirate and followed previous rates of 14.88 percent and 10.7 percent for 2008 and 2007 respectively.

The rate could have been even lower had it not been for a 5.4 percent rise in rents in Abu Dhabi, a key driver of inflation, the report said.

Price rises in the housing, water, electricity, gas and other fuel products group were the main reasons for lifting the inflation rate, SCAD added.

But clothing and footwear, prices of which decreased by 3.3 percent and 23.5 percent respectively during 2009 helped keep the rate at low levels.

The food and non alcoholic beverages group also helped to rein in inflation with prices falling by more than three percent last year.

Last week, Shuaa Capital said it expected the UAE economy to emerge from recession this year. GDP is forecast to grow 2.5 percent, a turnaround from the 3.5 percent year-on-year contraction it recorded in 2009.

A recovery in oil prices will also see Abu Dhabi emerge from recession this year and register GDP growth of 1.4 percent, compared to a contraction of 2.7 percent in 2009, it added.

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