UAE inflation up 0.97% in May

Consumer prices soared 0.97 per cent year-on-year in the month of May in the UAE, the second biggest Arab economy, as food and soft drinks items featured prominently amongst those that pushed the inflationary trends in the country, said the National Bureau of Statistics in its monthly inflation data. In a month-to-month comparison, inflation rose 0.26 per cent to reach 117.67 points in May, the bureau said. Analysts polled by Reuters in April forecast average inflation in the UAE federation would accelerate to 1.6 per cent in 2013 from 0.7 per cent in 2012, which was the lowest level since 1990. However, the International Monetary Fund (IMF) in its assessment under Article IV consultations on Sunday expected inflation to climb further to reach 2 per cent in 2013. In 2012, the fund saw the decrease of the inflation by 0.7 per cent down from 0.9 per cent in the comparable period. The IMF saw inflationary to soar in coming years as in 2014 it will rise 2.4 per cent and 2.5 per cent in 2015. The food and drinks segment which make up nearly 14 per cent of the basket contributed the biggest increase of 1.10 per cent, vegetables prices rose 6.30 per cent, fish 4.75 per cent, and milk and eggs 1.09 per cent in the April-May period. Commenting on the rise in the prices of food items, an executive at a retail chain told Khaleej Times that the rising value of US dollar against Indian rupee over the last one year has contributed to the rise in food items imported from India. Housing and cost of transport had the most insignificant impact on the Consumer Price Index (CPI) as they contributed only 0.08 per cent, respectively. The Index rose 0.44 per cent in Dubai, 0.35 per cent in Ras Al Khaimah and 0.32 per cent in Ajman. In Abu Dhabi, the CPI rose 0.28 per cent while in Sharjah, it climbed 0.02 per cent in May to become the least affected emirate. The IMF report cited the positive indicators of the UAE's overall economy, which is expected to grow 3.6 per cent in 2013, which is a result of economic activities supported by investments, trade, tourism and logistics support. From Khaleej Times