UAE inflation may drop to 7%

Plunging oil prices and a stronger dollar will bring the UAE’s annual inflation rate down to seven per cent from its last measured point of 11 per cent, a top official has said. The lower price of oil has brought local diesel prices down while the weaker European currencies will result in cheaper imports of food and consumer goods, Salah Al Shamsi, Chairman of the Federation of Chambers of Commerce and Industry and the Abu Dhabi Chamber of Commerce and Industry, told Emirates Business. Oil registered another fall yesterday to $64 per barrel, while the pound and the euro are at multi-year lows against the dollar. ADCCI has noticed the fall in prices of many building materials and foodstuff last month, with steel and rice registering the largest decreases, Al Shamsi said. Inflation will drop even more if property values and rents are reduced in the Abu Dhabi and Dubai markets, he said. A number of new residential buildings will enter the two markets next year and that will lead to a gradual decline in values and consequently the inflation rate, he said. By Abdel Hai Mohamad