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Abu Dhabi: Soaring housing rents and declining value of currency has pushed the UAE's inflation to 11.1 per cent - a 20-year high, the Ministry of Economy on Tuesday said in a report.
The government will launch official consumer price index (CPI) next year.
Housing accounted for 6.5 per cent of the increase, or 58.6 per cent of the overall inflation rate, the report said.
"The current basket is composed through sampling a variety of commodities and services groups representing the expenditure of the average household in the UAE," Sultan Bin Saeed Al Mansouri, Minister of Economy, said.
Inflation in the housing market was the highest, at 17.5 per cent on average for the whole year, after recording a whopping 23.9 per cent in the fourth quarter according to the ministry's report.
The cost of housing increased from 12.1 per cent in the first quarter to 15.3 in the second quarter to 18.9 per cent in the third quarter.
Average
"The 11.1 per cent is the average of the inflation rate for the four quarters, where it stood at 8.2 per cent by the end of March, 9.7 per cent for the second quarter, 11.9 per cent by the end of August, and 14.6 per cent for the last quarter," the report revealed.
Increasing inflation has been plaguing most of the world's economies, including all the six states comprising the Gulf Cooperation Council (GCC), as a result of increasing energy, commodities and food prices worldwide, in addition to the depreciating dollar.
The country's efforts to reduce the impact of rising inflation included the introduction of various rent caps in the different emirates, while the ministry of economy endeavoured the commitment of major retailers to sell basic goods at cost, even to sell at 2007 prices for some of them.
"This can only be a short-term measure that helps reduce the impact of rising prices; as it addresses the symptoms rather than the causes of the problem," Standard Chartered's Regional head of research Marios Maratheftis told Gulf News.
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