The UAE's consumer price index rose 2.5 per cent in 2021, reaching 108.62 points by the end of the year compared to 105.97 in December 2020, government data showed.
The inflation rate in December 2021, compared to November 2021, reached 0.02 per cent, state news agency Wam reported on Tuesday, citing the Federal Competitiveness and Statistics Centre.
Abu Dhabi recorded an inflation rate of 0.08 per cent during December 2021 compared to the previous month, the report said.
Dubai's inflation rate reached 0.09 per cent, Sharjah's 0.11 per cent, Ajman's 0.11 per cent, Umm Al Quwain's 0.11 per cent, Ras Al Khaimah's 0.13 per cent, and Fujairah's 0.10 per cent, it said.
The levels "reflect the economic stability and the efficiency of the state's fiscal policy and its ability to contain any domestic or external inflationary pressures", the report said.
The UAE, the Arab world’s second largest economy, rolled out a series of initiatives to support its economy last year and boost its competitiveness.
This includes a Dh388 billion ($105.65bn) stimulus programme to offset the effect of the coronavirus pandemic, as well as a new industrial strategy to increase the contribution of the sector from Dh133bn to Dh300bn in the next 10 years.
The Central Bank of the UAE said it expected the economy to grow 4.2 per cent in 2022, up from last year's 2.1 per cent, according to its latest quarterly report.
The country has embarked on economic, legal and social structural reforms aimed at strengthening its business environment, attracting foreign investment, drawing high-skilled talent and incentivising companies to set up or expand their operations in the UAE.
The reforms include the expansion of longer-term residency visas to broader categories of residents, wide-ranging changes to personal and labour laws, allowing 100 per cent foreign ownership of onshore companies and, most recently, the decision to change the UAE’s working week to Monday to Friday to align with other major economies.