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Fri 18 Jun 2010 10:23 AM

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Dubai consumer prices rise in May

M-o-M consumer price rise of 0.78% in Dubai mainly due to increase in housing costs, food prices.

Dubai consumer prices rise in May
INFLATION WATCH: Dubai is a member of the UAE but also publishes separate inflation data.(Getty Images)

Dubai consumer prices rebounded in May, rising 0.78 percent month-on-month, after falling for six months and boosted mainly by increasing housing costs and food prices, data showed on Thursday.

That reversed a 0.90 percent drop in April, the biggest monthly decline since at least 2008.

The global downturn slashed consumer price growth across the Gulf oil producing region from record peaks in 2008, with some countries such as the United Arab Emirates and Qatar seeing months of deflation last year.

Dubai is a member of the UAE but also publishes separate inflation data.

Compared with a year earlier, prices in May rose 0.48 percent after dipping 0.06 percent in April, the first annual decline since at least 2008, according to data from the Dubai Statistics Center.

Historical data beyond 2008, when annual inflation reached a peak of 10.8 percent, is not available.

Historical data beyond 2008, when annual inflation reached a peak of 10.8 percent, is not available.

The UAE has yet to release federal inflation data for May. Consumer prices in the UAE, the world's third-largest oil exporter, rose by 0.79 percent year-on-year in April and fell 0.04 percent on the month.

Inflation in the emirate of Abu Dhabi reached 0.28 percent month-on-month and 3.02 percent year-on-year in May.

The data for the UAE and the individual emirates are not directly comparable as basket weights differ.

Dubai, which lacks the oil wealth of its neighbour Abu Dhabi, took a big hit from the 2008 global crisis and recent debt restructuring problems, dragging down the UAE economy.

Prices in the key housing and energy component, which has a 44 percent weight in the Dubai basket, rose by 0.59 percent month-on-month in May, after a 2.4 percent plunge in April.

Food prices, which account for 11 percent of the overall index, rose 1.37 percent in May, after increasing by 0.47 percent in the previous month.

In a Reuters poll released on Thursday, analysts expected UAE inflation of 1.8 percent this year and GDP growth of 2.1 percent, the slowest rate in the Gulf. (Reuters)

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Longtimer 10 years ago

We have read on this very site that rents across Dubai are falling; I fail to see why the consumer prices are still rising. Month on month I have seen my basic cost of living in Dubai increase (even during the time you claim it fell). It is a failure of the government to curb rising cost of living despite falling rents and reduced tariffs in ports. It is a mafia out there controlling everything!