As shown in a report by the Washington-based Institute for International Finance (IIF), inflation in the UAE is projected to be around 1.9 per cent this year from the 0.6 percent last year, on the higher global commodity prices along with a surge in public expenditure.
This low rate is believed to be achieved with a downturn in the real estate sector despite the massive public spending.
?Inflation is on the rise across the Arab region, led by higher global food prices and substantial increases in government pending. To forestall discontent arising from political and economic conditions, most governments in Arab countries announced supplementary spending programmes,? IIF said in a report on the Arab world in light of the current political turmoil.
For the six nation Gulf Cooperation Council (GCC), the combined inflation rate is expected to be about 4.4 percent, with Saudi Arabia projected to have the highest rate of 5.7 percent this year.