Rising fuel costs are hitting consumers in the pocket as inflation gathers pace.
UAE consumer inflation accelerated to 2.3 per cent in January, up from 1.24 per cent in December, according to the Federal Competitiveness and Statistics Authority.
Medical care, education and transport expenses drove prices higher as economists expect further price pressures to emerge in the first quarter of this year.
While the cost of health care rose by 5.66 per cent year-on-year in January, educational expenses increased by 4.99 per cent and transport costs by 4.36 per cent.
“Higher inflation does not bode well for consumer sentiment, particularly against the backdrop of job cuts and slow economic activity,” said Dima Jardaneh, the Dubai-based head of economic research at Standard Chartered Bank.
Higher petrol costs have been one of the main inflation drivers following the deregulation of prices in the second half of 2015, say analysts.
“The rise in inflation will be particularly steep in the first quarter, with the higher energy prices on an annual basis,” said Monica Malik, Abu Dhabi Commercial Bank’s chief economist. “We expect the trend to moderate from the second quarter.”
Domestic petrol prices increased by about 6 per cent last month compared with December. The increase in utility and water charges in Abu Dhabi that came into effect last month also had an effect.
“Most central banks in the world target an inflation rate of around 2 per cent, which is a relatively healthy pace of price increases,” said Tim Fox, the chief economist and head of research at Emirates NBD. “The current inflation rate is close to this and our expectation is that it will average 2.5 per cent this year, which is not something to be overly concerned about.”
An increase in international oil prices could lead to a further rise in transport costs. Transport’s weight in the consumer price index (CPI) basket was raised to 14.6 per cent from 9.9 per cent previously. The statistics authority changed the base year for CPI calculations to 2014 from 2007 starting last October and changed the weights for the basket components, according to Reuters.
The introduction of value added tax (VAT) next year is also expected to be inflationary.
“Inflation is likely to be affected by the introduction of VAT, but the impact will depend on how much of the tax is passed on to consumers,” Mr Fox said. “Our Emirates NBD Purchasing Managers’ Index (PMI) data shows that companies have been effectively absorbing rising input costs over the last year, suggesting that they will be equally sensitive to raising prices by the full amount of the tax.”
Prices in the recreation and culture category dropped by 2.26 per cent in January compared with the same period last year. Last month, Abu Dhabi Commercial Bank forecast that inflation would touch 2.8 per cent this year, while Standard Chartered expected it to rise to 3 per cent.
In October, the IMF said that the UAE economy is expected to grow by 2.5 per cent this year, compared with 2.3 per cent last year.
Emirates NBD’s purchasing managers’ index (PMI) for the UAE rose to 55.3 in January from 55 in December, the highest since last July. A strong US dollar is expected to keep imports cheap and hence inflation in check.
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Sustainable Development Goals
1. End poverty in all its forms everywhere
2. End hunger, achieve food security and improved nutrition and promote sustainable agriculture
3. Ensure healthy lives and promote well-being for all at all ages
4. Ensure inclusive and equitable quality education and promote lifelong learning opportunities for all
5. Achieve gender equality and empower all women and girls
6. Ensure availability and sustainable management of water and sanitation for all
7. Ensure access to affordable, reliable, sustainable and modern energy for all
8. Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
9. Build resilient infrastructure, promote inclusive and sustainable industrialisation and foster innovation
10. Reduce inequality within and among countries
11. Make cities and human settlements inclusive, safe, resilient and sustainable
12. Ensure sustainable consumption and production patterns
13. Take urgent action to combat climate change and its effects
14. Conserve and sustainably use the oceans, seas and marine resources for sustainable development
15. Protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss
16. Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
17. Strengthen the means of implementation and revitalise the global partnership for sustainable development
Common OCD symptoms and how they manifest
Checking: the obsession or thoughts focus on some harm coming from things not being as they should, which usually centre around the theme of safety. For example, the obsession is “the building will burn down”, therefore the compulsion is checking that the oven is switched off.
Contamination: the obsession is focused on the presence of germs, dirt or harmful bacteria and how this will impact the person and/or their loved ones. For example, the obsession is “the floor is dirty; me and my family will get sick and die”, the compulsion is repetitive cleaning.
Orderliness: the obsession is a fear of sitting with uncomfortable feelings, or to prevent harm coming to oneself or others. Objectively there appears to be no logical link between the obsession and compulsion. For example,” I won’t feel right if the jars aren’t lined up” or “harm will come to my family if I don’t line up all the jars”, so the compulsion is therefore lining up the jars.
Intrusive thoughts: the intrusive thought is usually highly distressing and repetitive. Common examples may include thoughts of perpetrating violence towards others, harming others, or questions over one’s character or deeds, usually in conflict with the person’s true values. An example would be: “I think I might hurt my family”, which in turn leads to the compulsion of avoiding social gatherings.
Hoarding: the intrusive thought is the overvaluing of objects or possessions, while the compulsion is stashing or hoarding these items and refusing to let them go. For example, “this newspaper may come in useful one day”, therefore, the compulsion is hoarding newspapers instead of discarding them the next day.
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