Consumers in the UAE could feel a pinch this year as prices begin to edge up, driving a rise in inflation.
Higher prices for imported food and a stabilisation in the country's property market are expected to nudge inflation marginally higher, say economists.
High inflation can reduce the value of money, while concerns about future inflation can deter foreign investment.
This could spell higher prices at the supermarket and an end to the slide in home rental prices.
National Bank of Abu Dhabi (NBAD) has forecast inflation of 2.3 per cent this year, while EFG-Hermes is predicting 2 per cent inflation.
The IMF is expecting inflation of 1.5 per cent this year, up from 1 per cent last year, Sultan al Suwaidi, the Governor of the Central Bank, said on Monday.
"We expect some additional price pressure from higher food prices globally, and more stability in housing prices will impact inflation," said Dr Giyas Gokkent, the chief economist and head of research of the asset management group at NBAD.
A credit-fuelled property bubble supported by surging oil prices sparked heavy inflation across the Gulf in the years before the financial crisis.
This led to steady rises in the cost of consumer goods and property. Inflation in the UAE reached 10.8 per cent in 2008, according to the Ministry of Economy.
A subsequent decline in the price of oil and weakening of property values helped relieve inflationary pressures across the region.
The inflation rate in Abu Dhabi was 0.78 per cent last year, while Dubai recorded a rate of 4.06 per cent. An official figure for the country as a whole has yet to be released.
While there will not be a return to double-digit inflation this year, it could herald the start of inflationary pressures in Gulf economies, brought on by government stimulus measures that were aimed at spurring growth.
Concerns about keeping a lid on consumer price rises have already prompted officials from the Ministry of Economy to increase checks on the price of food staples.
Rising prices for goods and services could become a detrimental side effect of a recovery from the financial crisis, economists warn.
@Email:tarnold@thenational.ae
2025 Fifa Club World Cup groups
Group A: Palmeiras, Porto, Al Ahly, Inter Miami.
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Group C: Bayern Munich, Auckland City, Boca Juniors, Benfica.
Group D: Flamengo, ES Tunis, Chelsea, (Leon banned).
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Group H: Real Madrid, Al Hilal, Pachuca, Salzburg.
UAE currency: the story behind the money in your pockets
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Two months before the first round on April 10, the appetite of voters for the election is low.
Mathieu Gallard, account manager with Ipsos, which conducted the most recent poll, said current forecasts suggested only two-thirds were "very likely" to vote in the first round, compared with a 78 per cent turnout in the 2017 presidential elections.
"It depends on how interesting the campaign is on their main concerns," he told The National. "Just now, it's hard to say who, between Macron and the candidates of the right, would be most affected by a low turnout."
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Event info: The tournament in Kuwait this month is the first phase of the qualifying process for sides from Asia for the 2020 World T20 in Australia. The UAE must finish within the top three teams out of the six at the competition to advance to the Asia regional finals. Success at regional finals would mean progression to the World T20 Qualifier.
UAE’s fixtures: Fri Apr 20, UAE v Qatar; Sat Apr 21, UAE v Saudi Arabia; Mon Apr 23, UAE v Bahrain; Tue Apr 24, UAE v Maldives; Thu Apr 26, UAE v Kuwait
World T20 2020 Qualifying process:
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- The final six teams will be decided by a 14-team World T20 Qualifier.
World T20 standings: 1 Pakistan; 2 Australia; 3 India; 4 New Zealand; 5 England; 6 South Africa; 7 West Indies; 8 Sri Lanka; 9 Afghanistan; 10 Bangladesh; 11 Scotland; 12 Zimbabwe; 13 UAE; 14 Netherlands; 15 Hong Kong; 16 Papua New Guinea; 17 Oman; 18 Ireland
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Creator: Mike White
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Wins by KO: 26
Losses: 4
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Zakat: an Arabic word meaning ‘to cleanse’ or ‘purification’.
Nisab: the minimum amount that a Muslim must have before being obliged to pay zakat. Traditionally, the nisab threshold was 87.48 grams of gold, or 612.36 grams of silver. The monetary value of the nisab therefore varies by current prices and currencies.
Zakat Al Mal: the ‘cleansing’ of wealth, as one of the five pillars of Islam; a spiritual duty for all Muslims meeting the ‘nisab’ wealth criteria in a lunar year, to pay 2.5 per cent of their wealth in alms to the deserving and needy.
Zakat Al Fitr: a donation to charity given during Ramadan, before Eid Al Fitr, in the form of food. Every adult Muslim who possesses food in excess of the needs of themselves and their family must pay two qadahs (an old measure just over 2 kilograms) of flour, wheat, barley or rice from each person in a household, as a minimum.
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More than 2.2 million Indian tourists arrived in UAE in 2023
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