Abu Dhabi consumer prices rise 4.5% in Jan, Feb

Consumer prices in the UAE capital Abu Dhabi have risen 4.5 per cent in the first two months of the year following the introduction of value added tax, according to according to Statistics Centre – Abu Dhabi (SCAD).

The organisation’s data showed a 4.3 per cent rise in consumer price index inflation in February 2018 compared to February 2017, but prices were down 0.3 per cent on the previous month after inflation almost doubled in January for the country as a whole.

Read: UAE inflation jumps with VAT but restrained by housing

Inflation in a number of product areas surged during the first two months of the year including for transport, which was up 12.5 per cent and contributed 37.9 per cent of the overall CPI increase.

Food and beverage prices were up 6.3 per cent and accounted for 16.2 per cent of the increase, while miscellaneous goods and services increased 9.8 per cent and contributed 15.1 per cent.

These increases were offset by a smaller contribution to costs from the housing, electricity, gas and fuel category, which accounted for 20.7 per cent after rents fell 2.7 per cent during the period, according to SCAD.

By income group, the organisation said prices were up 4.6 per cent for those at the bottom welfare level and 4.2 per cent and 4.8 per cent for those at the emiddle and top welfare levels respectively.

Costs were seen to rise more for Emiratis (4.7 per cent) than residents (4.3 per cent) but rose the highest for shared household types (5.2 per cent).

The increasing prices followed a nationwide rollout of a 5 per cent value added tax rate on January 1 that applies to most goods and services.

Read: Revealed: Goods and services subject to VAT in the UAE