Dubai consumer prices slow as housing falls most on record

Consumer prices in Dubai, the second-biggest member of the United Arab Emirates, rose at a slower pace in July as housing and electricity prices tumbled the most on record. Consumer prices increased an annual 0.62 percent compared with 0.75 percent in June, according to data published Tuesday by the Dubai Statistics Center. Housing, water and electricity costs fell 3.5 percent, the most since May 2010. Food and non-alcohol prices rose at a slower pace last month, 6.1 percent, after that rate almost doubled in June. “The inflation outlook for the UAE will be capped on the upside with all this housing stock coming to the market,” said Shady Shaher, an economist with Standard Chartered in Dubai. “Yes, food prices are rising, but they are not giving that push for inflation; it continues to be capped by the housing component.” In 2009, Dubai sought $10bn from the UAE central bank and another $10bn from Abu Dhabi and its banks to help its state-owned companies after the global credit crisis suppressed property prices by more than half from their 2008 peak and frozen credit markets forced some of the emirate’s companies to delay loan payments.Property prices in Dubai, the Middle East’s worst performer for three years, have plunged more than 55 percent since mid-2008, according to Deutsche Bank.Consumer prices in Abu Dhabi, the capital, rose 2.3 percent in July from a year ago, the Statistics Center of Abu Dhabi said in an emailed statement today. Food and non-alcoholic beverage costs climbed 9.1 percent, mirroring the increase in global food prices.Economic growth will accelerate to about 3.5 percent in Abu Dhabi this year and to 3 percent in Dubai, the International Monetary Fund said in April.The National Bureau of Statistics said on Aug. 14 that inflation for the seven-emirate federation slowed to 1.3 percent in July from 1.7 percent the previous month. From / Arabian Business News