Dubai inflation rises fuelled by transportation and food costs

Dubai inflation accelerated in June, led by increases in food and transportation costs.

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The inflation rate rose to 0.8 per cent, the Dubai Statistics Centre said in a statement today. Food prices increased 6.7 per cent while transportation costs rose 6.6 per cent, the report said. In the month, prices increased 0.5 per cent.

"Across the GCC, food prices are the major inflationary driver, with the exception of Saudi Arabia which is also seeing strong housing inflation," Monica Malik, Dubai-based chief economist at EFG-Hermes UAE Ltd, said in a telephone interview. "We expect to see government measures to limit food price rises increasing in the run-up to the holy month of Ramadan, when prices normally strengthen across the region."

Record global food prices are likely to be sustained this year because of high crude oil costs and smaller crops, the United Nations Food & Agriculture Organisation said in March. Crude prices rose 15 per cent last year and are up 6 per cent this year.

Bloomberg