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Dubai: The UAE may be weathering the global financial turmoil, but it is not completely immune to the effects of inflation, a top official has warned.
Sultan Bin Saeed Al Mansouri, Minister of Economy, admitted that inflation remains a challenge to the UAE economy, so the business community must continue to cooperate with the government in the campaign against soaring prices.
The UAE's inflation rate rocketed to 11.1 per cent last year amid rising costs of housing, fuel and food.
"Inflation has recently created a challenge for world economies and the UAE is not immune to such a challenge. The UAE's inflation rate soared to 11.1 per cent last year.
"Many factors contributed to this increase - some are local and others are imported," Al Mansouri said at a business-networking event hosted by the Dubai Chamber of Commerce and Industry.
The minister, however, credited the retail sector for helping the government cushion the impact of inflation. A few months before Ramadan, several food retailers in the UAE agreed to keep prices of basic commodities stable.
"And for this we extend our gratitude to every one of you in the retail sector, who have partnered with us in curbing inflation, especially our partners in the food supply and the cement production sectors," Al Mansouri said.
Al Mansouri said the UAE has so far remained insulated from the global crisis due to the country's focus on diversifying its economy and emphasis on infrastructure spending.
Last year the UAE economy grew by 5.2 per cent based on fixed prices and 16.8 per cent on current prices. Gross domestic product rose to Dh729.7 billion. The non-oil sector's share of GDP rose 64.1 per cent to Dh467 billion.
Carrefour warned
Carrefour has received a warning from the UAE Ministry of Economy after officials found it had increased chicken prices at its Ajman store.
Ministry officials on Wednesday conducted inspections of the Fruit and Vegetable Market, Carrefour and LuLu Hypermarket in Ajman to monitor prices of goods. The consumer protection team inspected the prices of vegetables and fruit to ensure rates were fixed as per regulations.
Hashim Al Nuaimi, director of the ministry's Consumer Protection Department, who headed the inspections, warned retailers against price manipulation and urged them to ensure that price stability is maintained during Ramadan.
"Carrefour, which had raised prices of chicken, was warned and asked to visit the ministry's office in Ajman to justify this issue," the ministry said in a statement.
A meeting in June took place between the ministry and retail chains to discuss price reduction for Ramadan. Carrefour has earlier signed a pledge to reduce prices of many food items.
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