UAE’s inflation rate up 4.2% y-o-y in June

The consumer inflation rate in the UAE rose 4.2 per cent year-on-year in June, but it edged down by 0.3 per cent from last month, according to figures from the National Bureau of Statistics.

Housing and utility costs, which account for 39 per cent of all consumer expenses in the country, rose 10.2 per cent year-on-year but increased by just 0.8 per cent month-on-month.

Meanwhile food and soft drink prices, which make up for nearly 14 per cent of the basket, rose 1.4 per cent year-on-year and 0.8 per cent from May.

The UAE’s inflation rate reached 4.3 per cent this May while Dubai and Abu Dhabi recorded a six-year high in consumer prices that month.

The inflation rate rose to reach 5.2 per cent in Abu Dhabi and 4.7 per cent in Dubai during May, official figures revealed.

Consumer expenses in both the emirates have been rising sharply since 2013 after the economy rebounded following the financial crisis.

Subsequently, Dubai’s successful bid to host Expo 2020 also fuelled a development boom, indirectly causing an influx of talent to the region. This in turn led to a growth in property costs and rents.

In addition, residents also faced a hike in utility charges with Abu Dhabi increasing power and water tariffs this year. Meanwhile Dubai saw a rise in transportation charges with metro and taxi fares being raised last year.

Such fee hikes have contributed to driving up living costs in the UAE.

According to a recent survey by consultant Mercer, Dubai and Abu Dhabi were ranked the 23rd and 33rd most expensive cities worldwide to live in while they were also the most expensive destinations for expats in the Middle East.

The rankings of the two emirates have shot up significantly from the previous year, indicating the steep growth in living costs.

Dubai moved up 44 places from the 67th position last year while Abu Dhabi went up 35 places from the 68th position in Mercer’s 2014 list.