By Daliah Merzaban
Emirates plans to update consumer price index following review, source reveals.
The UAE plans to update its consumer price index to reflect price trends more accurately and release data more regularly, possibly every month, a person with direct knowledge of the matter said.
The UAE is the only Gulf country to release inflation data annually and usually months after the end of the year. It has yet to give data for 2007.
The UAE Ministry of Economy will conclude a year-long consumer-spending survey next month after collecting weekly data on the expenses of 6,000 to 7,000 families, said the person, who did not want to be identified.
"The survey will be used to modify the index and calculate inflation going forward," the person said. "This will enable the government to release data more regularly rather than just one time a year."
Inflation in the UAE hit a 19-year high of 9.3% in 2006. It probably accelerated to 10.9% last year on surging rents, National Bank of Abu Dhabi (NBAD) said this week.
Rents, the biggest driver of inflation across the Gulf, has a 36% weighting in the UAE consumer price index.
The Economy Ministry will use results of the survey, completed in conjunction with statistics departments in the emirates of Abu Dhabi and Dubai, to make any necessary modifications to its consumer price index, the person said.
"This is part of the federal government's strategy to release data and information in a way that is more up to date and accurate," the person said.
The government is also setting up a statistics centre based in Abu Dhabi that will liaise with the different emirates to provide regular economic indicators, including gross domestic product statistics, which are also released only annually.
Like most other states in the world's top oil-exporting region, the UAE is constrained in its fight against inflation by its dirham currency's peg to the dollar, which forces it to track US interest rate cuts.
UAE Central Bank Governor Sultan Nasser Al-Suweidi said in November he was under mounting social and economic pressure to drop the peg and adopt a basket of currencies including the euro to help tame inflation.
He has since backtracked on those remarks, saying on Monday that dollar pegs have served Gulf economies "very well" because they have helped the states attract investments.
Saudi Arabia, Kuwait and Oman publish monthly inflation data, while Qatar releases price statistics quarterly. Bahrain has begun calculating inflation data monthly. (Reuters)