Fall in property rents lead to lower inflation levels in Dubai
Dubai has recorded a considerable drop in inflation rate, down to 5.4 percent during January to May, mainly due to the sharp decline in property rents, a top Dubai government official said.
During the initial five months of 2008, it was 8.7 percent, the Head of Dubai Statistics Center (DCS) quoted.
The rents for housing units increased by 3.2 percent during the first five months, compared to 5.4 percent increase during the same period last year.
Rents in Dubai had doubled during the building boom, which ended last year, following the onset of global financial crunch, coupled with drop in oil prices.
The Central Bank Governor of UAE, last month, said that a rapid price fall in the country, which witnessed inflation drop to 1.9 percent in April, will not lead to deflation.
With the revised growth estimates, Morgan Stanley also predicted that UAE economy would shrink by 0.6 percent in 2009, while other investment banks, such as EFG-Hermes, estimated annual decline of 1.7 percent.
Posted on 6/7/2009
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