Consumer prices in Dubai jumped in January on the back of higher fuel prices.
Prices advanced 3.7 per cent year-on-year in January compared with 2.2 per cent year-on-year in December, the Dubai Statistics Centre said on its website.
“The higher transport costs were likely linked to the rise in fuel prices in January,” said Monica Malik, the chief economist at Abu Dhabi Commercial Bank.
“Diesel prices were up around 20 per cent year-on-year in January, while petrol prices were some 13 to 14 per cent higher. We expect to see a further acceleration in transportation costs in February, due to the very low prices last year. We expect to see transportation inflation softening from the second quarter of 2017.”
A barrel of Brent crude was yesterday trading at $55.81.
Brent began last year at $37.27 and was down to $34.74 by the start of February, but had rallied to $49.68 by midyear.
Dubai’s jump in January prices contrasts with a sharp slowdown in inflation for the country as a whole in December, showed the latest nationwide figures, released yesterday. The national consumer price index in December rose 1.2 per cent year-on-year compared with 2.6 per cent in November, according to the Federal Competitiveness and Statistics Authority.
The reason for the easing was that the cost of food and beverages fell because of the strong US dollar, to which the dirham is pegged, and a slide in the cost of housing.
Food and beverage prices gained 0.5 per cent in December compared with 1 per cent in November while housing, fuel, light and water prices advanced 1.6 per cent in December versus 4.8 per cent in November.
“A fall in food prices was central to the deceleration in headline inflation in December,” Ms Malik said. “The strong US dollar is helping to keep imported prices down, including foodstuff and clothing.”
The Bloomberg Dollar Index, which tracks the value of the American currency against a basket of 10 global currencies including the euro and the yen, has gained more than 5 per cent since Donald Trump’s US election victory in November. During that period it touched a record high since its creation in 2005.
mkassem@thenational.ae
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