The inflation rate in Dubai decreased substantially last year, falling from 4.0 percent to 0.6 percent. This fall was due to continuing weaknesses within the real estate sector which was heavy on consumer price growth in Dubai, according to data.
Dubai is included in the seven member emirates of the UAE federation (United Arab Emirates). Inflation in this particular area has stayed under 1 percent for the better part of 2010 due to the struggles with debt that state-run firms experienced. These struggles dampened how quickly businesses and trading were able to recover.
Housing costs make up the majority of the inflation basket with a 44 percent allocation. Those prices dropped 1.3 percent last year after rising 2.4 percent in 2009, according to information provided by the Dubai Statistics Center.
The price of communications, accounting for a 6 percent portion of living costs, dropped 10.6 percent when compared with the previous year after declining only 0.2 percent through 2009.
Although the cost of food has been driving up inflation rates around the Gulf region last year, it recorded only a 1.9 percent hike. Transportation costs continued to climb rising 6.6 percent last year after gasoline prices, which are heavily subsidized, increased.
December’s monthly rate of inflation was not released by the statistics office. The December figures for the whole group of emirates have not yet been published.
Dubai’s consumer price growth should accelerate in 2011 due to the success of Dubai World’s recent deal to restructure $25 billion in debt. The state-run conglomerate announced the deal in September.Paul Holdsworth, Staff Writer, Gulf Jobs Market News