RIYADH: In line with the global trend, Dubai saw its annual inflation rate rising to 4.9 percent in February driven by an increase in food and beverages costs, the latest data from the emirate's Statistics Center showed.
This comes as Dubai’s Consumer Price Index rallied by 0.32 percent in February from 4.58 in January.
According to the report, food and beverage prices increased by 6.29 percent in February, while the prices of housing, water, electricity, gas and other fuels surged by 4.87 percent.
The rise in inflation for the month of February was also driven by an increase in prices of restaurants and accommodation services and insurance and financial services which went up by 4.47 percent and 5.41 percent respectively.
The report, however, added that the prices of furnishings, household equipment and routine household maintenance marginally went down to 9.42 percent in February, from 9.50 percent in January.
Inflation in the UAE has stayed relatively low when compared to other parts of the world, as the emirate showed signs of recovering from the pandemic, amid global economic headwinds.
According to the UAE Central Bank, the country’s economy had grown 7.6 percent in 2022, the highest in 11 years, after expanding by 3.9 percent in 2021.
Earlier in March, data analytics firm Kantar said that inflation and the resulting price rises are putting pressure on consumers in the UAE.
“Spending has remained high since 2019 and this ongoing financial strain is leading consumers to change the way they shop,” said Imtiaz Hashem, consumer insights director at Kantar Worldpanel, UAE.
But despite this, he added the UAE economy ended 2022 solidly and signs suggest this growth will continue but might slow in the first half of 2023.
In February, a report released by Kuwait-based investment strategy and research firm Kamco Invest said that the inflation rate in the Gulf Cooperation Council countries is showing a downward trend in 2023 compared to 2022.
The International Monetary Fund, in its World Economic Report, also noted that nearly 84 percent of the countries in the world are forecasted to have lower consumer price index inflation growth in 2023 than in 2022.
IMF added that global headline inflation would fall from an annual average of 8.8 percent in 2022 to 6.6 percent in 2023 and further to 4.3 percent in 2024.
Amid economic uncertainties, Saudi Arabia also showed strong signs of combating inflation effectively in February.
In March, a report released by Saudi Arabia’s General Authority for Statistics showed the Kingdom’s inflation rate has softened to 3 percent in February 2023, against 3.4 percent recorded in January, driven by a slight decrease in food and beverage prices.
The monthly consumer price index was affected by a 0.6 percent fall in food and beverages prices, as a result of the decrease in food by 0.7 percent.
The GASTAT data revealed that transport prices also fell by 0.5 percent in February against the previous month, mainly due to the decrease in motor car prices by 0.9 percent.