UAE records moderate rise in inflation

According to the Central Bank of the United Arab Emirates (CBUAE), the CPI inflation rate in the United Arab Emirates turned positive during the third quarter of 2021, for the first time since the fourth quarter of 2018, at 0.6%. year-on-year.

The 2021 FCSC report showed that the inflation rate for food and beverages stood at 3.71%, that of tobacco at 0.65%, clothing and footwear at 0.51%, while the housing, water, electricity and gas fell by 2.58. percent. Equipment and household equipment recorded an inflation rate of 2.13%, while that of health services was at 0.45%, communications at 0.13%. Education fell 0.20%, restaurants and hotels rose 1.60%, and miscellaneous goods and services fell 1.02%.

The report also revealed that Abu Dhabi recorded an inflation rate of 0.08% in December 2021 compared to November, while the inflation rate in Dubai was 0.09%, Sharjah at 0.11 %, Ajman at 0.11%, Umm Al Qaiwain at 0.11% cent, Ras Al Khaimah at 0.13% and Fujairah at 0.10%.

Moderate inflation rates highlight the country’s economic stability and the effectiveness of its financial po

The CBUAE projected that the gross domestic product (GDP) of the United Arab Emirates would increase by 4.2% in 2022 and real non-hydrocarbon GDP would increase by 3.9%.

The CBUAE, in its last quarterly economic review, had indicated that inflation is expected to rise moderately in 2022, largely due to rising global prices. Higher inflation is expected to lead to an increase in the federal funds rate, which would lead to an increase in the CBUAE base rate for the Overnight Deposit Facility (ODF), which provides a rate floor for effective interest for overnight money market rates in the UAE. The central bank said it will monitor economic and financial developments and the liquidity situation of banks operating in the UAE to meet the financing needs of the private sector.

About Tammy N. McFarlane

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