Abu Dhabi consumer prices expected to increase 3.3% in Q3

Consumer prices in the UAE emirate of Abu Dhabi are expected to increase 3.3 per cent year-on-year in the third quarter after a similar rise in the first half linked to higher oil prices and a new value added tax, according to Statistics Centre Abu Dhabi (SCAD).

The government body said consumer inflation rose 3.6 per cent in the first half of the year compared to the same period in 2017, driven by an increase in consumer price inflation (CPI) to 111.9 per cent from 108 per cent.

Prices in June 2018 were up 3.3 per cent on June 2017 and increased 0.5 per cent on the previous month.

The rise in price inflation in the first half was driven by transport, which increased 9.4 per cent and accounted for 36.4 per cent of the overall increase, and clothing and footwear, which rose 14.1 per cent and accounted for 19.6 per cent.

Miscellaneous goods and services contributed 14.9 per cent of the overall increase after rising 7.6 per cent but housing, water, electricity, gas and fuel detracted 32.5 per cent after a 3.4 per cent fall in property rents.

Second quarter data from Asteco showed residential apartment and villa sales prices down 8 per cent and 4 per cent respectively year-on-year and 4 per cent and 2 per cent quarter-on-quarter. Rents rose 8 per cent and 5 per cent year-on-year and 4 per cent and 2 per cent quarter-on-quarter.

Read: Abu Dhabi rents, sales prices drop as demand lags supply

Abu Dhabi accounted for 43.4 per cent of the inflation increase in the first half, with prices up 2.7 per cent. Al Ain accounted for 49.1 per cent and Al Dhafra 7.5 per cent.

The UAE introduced a 5 per cent value added tax on January 1 that applies to most goods and services including food, fuel and utility bills.

Read: Here’s how the UAE’s VAT refund system for tourists will work