Annual inflation in Dubai rose 2.74 per cent year-on-year in the first six months of 2014, according to a report from the Dubai Statistics Centre (DSC).
The rise in the Consumer Price Index was spurred by an increase in the costs of major groups including housing, water, electricity, gas and fuels at 4.58 per cent, education at 4.43 per cent and food and non-alcoholic drinks at 3.36 per cent.
Almost all sectors posted an increase in prices during the first half of the year – furniture and household goods rose by 2.53 per cent, alcoholic beverages and tobacco by 2.35 per cent, restaurants and hotels by 2.19 per cent, health by 2.16 per cent, miscellaneous goods and services by 1.76 per cent, transport by 0.79 per cent, communications by 0.7 per cent, and culture and recreation by 0.11 per cent.
The report noted that only ready-made clothing and footwear fell by 2.89 per cent during the January- June period.
The UAE’s inflation rate has been growing strongly this year, and is officially predicted to hover around two per cent. However, economists have warned that inflation may edge above four per cent this year, driven by Dubai’s booming property market.
The International Monetary Fund cautioned in a recent report that the emirate must monitor the real estate sector closely. “With rent controls recently loosened, there is a risk that rising real estate prices will feed more strongly into inflation,” it said.
Average inflation in the UAE hit 1.1 per cent in 2013 from 0.7 per cent in 2012, down sharply since a record 12.3 per cent in 2008, prior to Dubai’s property crash.