UAE: Consumer prices continue to fall in February
Consumer prices dropped 0.41% in February over the previous month, swinging from the 0.15% increase logged in January. February’s result marked the sharpest decrease in prices in five months. The reading chiefly reflected lower prices for housing, water, electricity and gas, as well as for food and beverages. The overall decrease was cushioned by higher prices for transportation, however.
Consumer prices declined 2.0% on an annual basis in February, accelerating from January’s 1.9% fall. Meanwhile, the trend pointed down, with annual average variation of consumer prices coming in at minus 2.2% in February, down from January’s minus 2.1%.
Consumer price pressures will have remained subdued in Q1. Looking ahead, however, the fall in prices should continue to moderate in Q2 and inflation should come back in H2 with the strengthening of economic activity as the Covid-19 vaccine is gradually rolled out and restrictions globally lifted.