A report recently issued by the Dubai Statistics Centre (DSC) showed that annual inflation of the consumer price index (CPI) for goods and services has risen by 4.33% in February 2015, compared to the same period of 2014. The group of Furniture, Furnishings, and Household Items and maintenance topped the rise by 11.24% followed by tobacco at 9.35%.
Moreover, clothing and footwear group index rose by 8.32%, and housing, water, electricity, gas and fuel group increased by 7.56%. The tuition fees affected the education index to be increased by 2.60%; meanwhile, Miscellaneous Goods and Services increased by 2.38%.
The Communications index recorded a comparable increase at 2.36%. where Restaurants and Hotels goods and services prices increased by 1.77%, Transport by 1.26%, Health by 1.03%, while the index was declined in Recreation and Culture by 0.71%, as well as Food and Beverages by 0.64% down.
Monthly Inflation Rate
On the other hand, the DSC report suggested that monthly inflation of the Consumer Price Index (CPI) for Goods And Services group has risen by 0.24% in February 2015, compared to January 2014, due to increase in prices of Housing, Water, Electricity, Gas and Fuel by 0.65%.
In terms of relative importance in the CPI, the said group considered the highest one where its relative importance reached 43.70%. Meanwhile, the prices of Food and Non-alcoholic Beverages rose by 0.22% at a relative importance of 11.08% of the total consumer basket, and the miscellaneous goods and services group by 0.05% at a relative importance of 6.15%.
Moreover, restaurants and hotels group rose by 0.01% at a relative importance of 5.48%, while prices of Furniture, Furnishings, and Household Items and maintenance decreased by 0.23% since this group accounted for 3.34% of the total consumer basket, as the Transport prices dropped by 0.22% with a relative importance of 9.08%.
Furthermore, the inflation index for recreation and culture group fell by 0.10% with the relative importance of 4.24% of the total consumer basket, while the rest of group prices remained stable at their previous levels during the compared period having no effect on the index movement.
Worth noting that the relative importance of each group within the consumer basket is 0.24% for Alcoholic Beverages and Tobacco, 5.52% for Clothing and Footwear, 1.08% for Health, 6.00% for Communications, and 4.09% for Education of the total consumer basket.
The CPI inflation rate in the main expenditure groups was as follows:
Food and non-alcoholic beverages: change in the prices of goods and services from the previous month within the food and beverages group has led to rise in the inflation index for such group by 0.22%, due to the increased prices of fruits at 5.30%, followed by fish and seafood prices at 0.72%, then the oils and fats prices at 0.20% .
Upon studying the index at the annual level, it's found that inflation rate of the group dropped by 0.64% due to low prices of fish and seafood at 14.19% compared to January of the last year where bad weather conditions, high waves and winds were encountered over the same period, followed by a decline in vegetable prices at 4.50% due to increased domestic production, and an increase in the prices of mineral water, soda water and juices at 0.49%.
Tobacco: it was noted that monthly inflation index for Tobacco group remained stable while the Tobacco annual index witnessed a rise of 9.35% due to increase of 11.47% in the tobacco prices where prices were increased in all outlets since last July.
Clothing and Footwear: Despite the stability of inflation index of clothing and footwear group compared to the last month, the annual inflation index rose at 8.32% out of the increased prices of Ready-made Garments by 11.39%, followed by shoes and footwear prices by 2.80%, then the fabrics prices by 2.29%.
Housing, Water, Electricity, Gas and Fuel: having monitored the group prices, it was noted that the monthly inflation index has risen by 0.65% as a result of the increased rents paid by tenants at 0.83%, which comes as a continuation of the monthly prices rises witnessed by the Emirate since November 2012.
Within the successive rises in the prices of goods and services, the annual index of inflation increased by 7.56% in the same group. This mainly came as a result of the increased rents paid by tenants at 9.39%, which comes as a continuation of the monthly prices rises witnessed by the Emirate since March 2013 at the annual level, and the higher prices of the liquid fuel by 1.77%.
Furniture, Furnishings, and Household Items and maintenance: the prices of goods and services in this group recorded a drop resulting in a decline of the inflation index by 0.23% on a monthly basis.
The index movement was in such manner due to the decreased prices of pots, metal and glass housewares and tableware by 2.88%. Moreover, Prices of small and various accessories (home lighting accessories) also dropped by 1.52% at the annual level.
The group annual inflation index rose by 11.24% as a result of higher prices of the small household electrical appliances which increased by 27.26%, home services increased by 22.07% due to the Philippines suspension of the domestic workers supply resulting in lack of demand for employment, and a growing demand for available nationalities. Further, non-durable household prices increased by 2.49%.
Health: it was noted that monthly inflation index remained stable for this group; however, annual inflation index for the prices of goods and services rose in the Health group up to 1.03% affected by the increased prices of medical products at 7.93%, followed by Hospital Services prices at 3.76%, then physician and nursing services prices by 0.94%.
Transport: the Group has witnessed a decline in the monthly inflation index at 0.22% resulting from the drop in prices of goods included in the air transport by 2.72%.
This was attributed to the close of holiday season, as the purchasing prices of personal transportation decreased by 1.75%, as well as the prices of fuel and oil for transportation which encountered a decrease of 0.05%, after oil companies in the Emirate decided to reduce diesel sale price at their affiliated service stations. Oil prices have also witnessed decline on a global scale.
At the annual level, the inflation index for this group recorded a rise of 1.26% as a result of increased road transport prices at 13.83%.
Following a decision by the RTA on the new tariff for taxi trips within the Emirate since the beginning of last December 2014, the increase in the prices of spare parts and accessories by 7.48% and increase in the prices of motorcycle by 3.54% due to the clemency and high number of land trips resulting in raising the annual inflation index.
Communications: Despite the stability of the inflation index for the prices of this group compared to last month, the annual inflation index rose by 2.36% affected by the increase of postal services' prices by 11.08%, Emirates Post has raised the postal box fees for individuals since December. Telecommunication services' prices also rose by 2.48%.
Recreation and Culture: this group recorded a slight drop in the monthly inflation index by 0.1% due to the decreased prices of audiovisual devices by 5.37%, and prices of stationery and drawing materials by 0.50%. The prices of information processing equipment also dropped by 0.20%.
By the same token, the group annual inflation of index declined by 0.71% as a result of the decline witnessed in the prices of audiovisual devices by 34.96% due to the rapid development of IT sector, followed by the prices of information processing equipment at 11.20%, and stationery and drawing materials prices by 6.39%.
Education: the group monthly inflation index remain stable due to the nature of the academic year in the Emirate, while tuition fees at the annual level has witnessed an increase resulting in a rise of the Education Group inflation index by 2.60% ..
Tuition fees for secondary school has seen the highest rise in prices at 3.12%, while in a close percentage, the tuition fees for kindergarten and the first phase have increased and recorded 3.04%. Meanwhile, university tuition fees rose by 1.41% affecting the group inflation.
Restaurants and Hotels: the prices of goods and services in this group witnessed a slight increase in the monthly inflation index by 0.01% as a result of the increased prices of hotels accommodation by 0.50%. In the same context, the group annual inflation index rose by 1.77% due to the increased prices of hotel accommodation by 2.17%, and the prices of restaurants and cafes by 1.77%.
Regions
The index of consumer prices in Abu Dhabi region only increased by 4.7% in February 2015 compared to the same period of 2014. The index of consumer prices decreased by 0.2%in February 2015 compared to the index of January 2015.
In Al Ain, the index of consumer prices increased by 3.9% in February 2015 compared to the same period of 2014. The index of consumer prices decreased by 0.4%in February 2015 compared to the index of January 2015.
In Western Region, the index of consumer prices increased by 3.9% in February 2015 compared to the same period of 2014. (Al Bayan)
4.8% Inflation in Abu Dhabi in January and February
The Statistics Centre - Abu Dhabi (SCAD) announced that the annual inflation for the first two months of 2015 reached 4.8%, with an average index of consumer prices at 132.3 points over the two months, compared to 126.2 points in the same period of 2014 where the annual inflation rate for February was 4.6%.
The Statistics Centre - Abu Dhabi (SCAD) pointed out that the group of «Housing, water, electricity, gas and other fuels» is the highest one contributed to the increased witnessed in the first two months compared to the same period of 2014 where the same group contributed at 85.4% of the overall increase rate where prices of this group rose by 11%.
As for the second highest group in terms of contribution to the index, it was "household tools and equipment, and home regular maintenance" at a percentage of 16.2% out of the overall increase. The group prices rose by 15.4% while the "miscellaneous goods and services" prices rose by 3.1% with contribution at 2.9% of the overall increase.
The Statistics Center – Basso Dhabi (SCAD) added that thee consumer prices rate in February rose by 4.6% compared to the same period of the same period in 2014 where the consumer prices index reached 132.1 points in February 2015 meanwhile it was 126.3 points in February 2014.
Groups of Expenditure
The most important groups of increased prices in February 2015 compared to February 2014 were "household tools and equipment, and regular home maintenance" at a percentage of 15.9%.
"Housing, water, electricity, gas and fuel" contributed at 11.0%, education at 5.9%, tobacco and beverages at .3%, recreation and culture at 2.1%, while the consumer prices index dropped by 0.2% in February 2015 compared to January 2015.
Moreover, the consumer prices index during the first two months of 2015 increased at 4.8% compared to the prices during the same period of 2014 resulting in increasing the consumer prices rates for the "low" luxury class at 6.1% over the comparison period. Moreover, the prices increased for the "middle" luxury class at 4.8% while for the "high" luxury class rose by 4.7%.
Impacts
The increased consumer prices indices during the first two months of 2015 at 4.8% compared to the same period of 2014 for the consumer prices for the UAE-national families at a percentage of 4.1% and at 5.5% for the non-UAE national ones over the comparison period. In addition, the consumer prices of the collective households were affected at a percentage of 5.6%.
The increase of consumer prices in February 2015 at 4.6% compared to the same period of 2014 resulted in increased consumer prices for the UAE-national families at 3.9% and at 5.3% for non-UAE national ones during the same period while the consumer prices of the collective households were affected at a percentage of 5.5%.
Meanwhile, the consumer prices indices in February 2015 dropped at 0.2% compared to the same of January 2015. Abu Dhabi region contributed at 71.6% of the overall increase achieved over the first two months of 2015 compared to the same period of 2014; moreover, Al Ain region contributed at a percentage of 22.1, and the Western Region at 6.3% of the overall increase occurred during the said period.