Inflation in UAE is expected to average two per cent this year from 1.1 per cent last year on higher house prices in Dubai, Business Monitor International (BMI) said in its revised forecast.
“Inflation continues to tick higher in the UAE, with Dubai leading the price rise. We forecast inflation to average 2.0% in 2014, up from 1.1 % in 2013. The key driver of inflation in the UAE will be house prices, as the inflationary impact of food diminishes,” Emirates 24/7 reported.
On the back of a stronger-than-expected recovery in Dubai’s residential property sector, it revised up 2014 average inflation forecast, and now project the headline print coming in at 2.0% this year.
Earlier this month, Moody’s Investor Service also forecast rise in UAE inflation this year. “Despite the governments’ efforts to moderate price increases, inflation has picked up in Saudi Arabia, Qatar and the UAE, and we expect it to rise further in 2014 for all countries except Bahrain,” the ratings agency said.
BMI projected relatively solid growth over the coming quarters, with UAE real GDP forecast to expand 3.9% and 4.1% in 2014 and 2015, respectively.
The outlook for Dubai has become more promising as the emirate benefits from increased activity in the trade and tourism sectors, in addition to the all-important real estate industry is now on the road to recovery. Credit growth to the private sector will remain anaemic through 2014 as commercial banks continue to increase provisioning against potential loan losses due to the debt funding cliff.
“Inflation continues to tick higher in the UAE, with Dubai leading the price rise. We forecast inflation to average 2.0% in 2014, up from 1.1 % in 2013. The key driver of inflation in the UAE will be house prices, as the inflationary impact of food diminishes,” Emirates 24/7 reported.
On the back of a stronger-than-expected recovery in Dubai’s residential property sector, it revised up 2014 average inflation forecast, and now project the headline print coming in at 2.0% this year.
Earlier this month, Moody’s Investor Service also forecast rise in UAE inflation this year. “Despite the governments’ efforts to moderate price increases, inflation has picked up in Saudi Arabia, Qatar and the UAE, and we expect it to rise further in 2014 for all countries except Bahrain,” the ratings agency said.
BMI projected relatively solid growth over the coming quarters, with UAE real GDP forecast to expand 3.9% and 4.1% in 2014 and 2015, respectively.
The outlook for Dubai has become more promising as the emirate benefits from increased activity in the trade and tourism sectors, in addition to the all-important real estate industry is now on the road to recovery. Credit growth to the private sector will remain anaemic through 2014 as commercial banks continue to increase provisioning against potential loan losses due to the debt funding cliff.
Source:
Mubasher
