United Arab Emirates: Inflation inches down in February
March 24, 2018
Consumer prices fell 0.15% in February from the prior month, a significant downswing from January’s 2.67% month-on-month increase. The large difference is partly explained by the implementation at the beginning of the year of a 5% VAT and higher taxes for energy and carbonated drinks and tobacco, which caused an exceptionally steep month-on-month price increase in January. According to the Federal Competitiveness and Statistics Authority, the biggest negative contribution to the overall reading in February came from decreases in the prices of food and beverages; transportation; and housing, water, gas and electricity, in that order.
Meanwhile, inflation eased from 4.8% in January—the highest level since August 2015—to 4.5% in February. Annual average inflation inched up from 2.2% in January to 2.3% in February.
Author: Joffrey Simonet, Economist