26 April, 2009

UAE inflation to drop

According to this EmBiz 24|7 report, the IMF forecats the UAE inflation rate to drop by 2%:

The UAE is to record one of the lowest inflation rates in the region at around two per cent from 11.5 per cent. "For the region as a whole, inflation pressures are projected to subside quickly, owing to lower commodity prices, rents, and economic activity," the IMF said in its World Economic Outlook.

Let's hope it does drop. Have any of you noticed prices going down in everyday purchases (beyond sales of course)? I personally haven't.


BuJassem said...

a positive inflation figure (of +2%) means that prices are increasing still, but at a decreasing rate (from 11 or so %).

if you want price drops then it's called deflation and you'll get something like -2%. you don't want that, coz that's when economies collapse and currency loses its value.

Media Junkie said...

thanks for that tip. :)

kaya said...

Prices going down! Snort!
Okay all that mathica maths (as my 7 yr old calls Mathematics) went over my head.

Anonymous said...

i just noticed this morning that Indian onion now costs AED 1/- per kg at my supermarket. Royal Gala apples are down to 3.70 per kg.

In case of some products, the prices have infact come down..


Lirun said...

im no economist but often these things are driven by a few key factors ie the prices may all be going one way but oil could behave so differently for example that a result will register that will not really reflect the reality of consumer price evolution.. especially since even though we may have cost savings these are not always passed down because during risky times many companies will seek to retain more of a buffer to account for risks.. especially banks for that matter..

Anonymous said...

SURE, WHAT A JOKE !!!!!!!!!!!!!

i*maginate said...

Anon... I love indian red onion ... and royal gala is my fave (not the Chinese kind!) ...however, I don't think a drop in onion price is really going to affect my lifestyle. If the price of apples goes up thought, I might replace them with onions.

Anonymous said...

This is a forecast. We wont feel the effects of it till things go through the motions.

This was bound to happen, though not all of a sudden like this. But with some companies that were in real trouble posting a profit last 1/4, maybe the upturn in the cycle is on it's way.

One thing is sure, this whole situation had corrected (to some extent) the real estate market, especially in Dubai.

Lirun, What kind of "buffer" are you talking about exactly? Banks in particular always have buffers in anything they do. It's what makes them almost as profitable as brothels.

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