Inflation in Dubai dipped dramatically in January as gasoline prices fell on the back of 12-year lows in oil prices.
Inflation fell to an annual rate of 1.9 per cent in January, down from 3.1 per cent in December 2015.
Transport costs, which account for around 9 per cent of the consumer price index basket, fell 4.1 per cent year-on-year in January.
The price of unleaded gasoline 98 has fallen by 25 per cent since August 2015, when the government moved to set fuel prices in line with international pricing benchmarks.
Oil prices have fallen dramatically since their June 2014 peak of $110 per barrel. In January, both Brent and WTI fell below $30 per barrel.
Falling inflation could also be a sign of slowing economic activity in the emirate. Informal measures of growth show Dubai’s economy growing at its slowest pace since 2010, when the emirate was struggling to shake off the impact of the 2008-9 housing bubble.
House price rises continued to show up in January data. Analysts believe that house prices are falling in Dubai, and that official statistics lag behind market developments – meaning that inflation in the emirate could be lower than the official figure.
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