A decline in costs of housing, water electricity, gas and fuel has helped to bring down the cost of living in Dubai during the first half of 2012, Dubai Statistics Centre said in its latest report on Wednesday.

“Prices of sand services are deflating in Dubai to record a 1.48 per cent drop in the first half of 2012 compared to the same 2111 period,” the report said.

While the cost of housing, electricity, gas and fuel dropped by an aggregate rate of 6.02 per cent, clothing and footwear group slid by 2.02 per cent. Communication group also recorded a slight decrease in the first half.

Sectors showing continued inflationary trends included food and non-alcoholic beverages, up by 3.77 per cent (mostly driven by a 10 per cent surge in prices of fish), goods and services group (2.31 per cent), furnishings and household appliances (2.23 per cent), transport (1.86 per cent), education (1.81 per cent, alcoholic beverages and tobacco (0.42 per cent), recreation and culture (0.3 per cent), restaurant and hotel (0.29 per cent) and health (0.11 per cent).

In June, however, inflation rose 0.8 per cent, led by increases in food and transportation costs. Food prices increased 6.7 per cent while transportation costs rose 6.6 per cent, the report said. In the month, prices increased 0.5 per cent.

Analysts said food prices are the major inflationary driver across the GCC. Record global food prices are likely to be sustained this year because of high crude 
oil costs and smaller crops, the United Nations Food & Agriculture Organisation said in March.

In Abu Dhabi, inflation advanced 1.3 per cent in the first half of 2012 compared with the same period in 2011, Statistics Centre — Abu Dhabi, or Scad, said in its report.

“Food and non-alcoholic beverages”, which accounted for 64.4 per cent of the rise in the index, due to increases in the prices of most of the subgroups included in this group.

The largest price increase was in the “meat” sub group, which surged by 10.9 per cent, followed by “fish and seafood” (up 10.3 per cent), “coffee, tea and cocoa” (up 9.4 per cent), “oils and fats” (up 6.9 per cent) and “milk, cheese and eggs” (up three per cent).

The next largest contributor to the overall rise in consumer prices in the capital over the first half of 2012 was the “restaurants and hotels” group, which accounted for 42 per cent of the increase as the group’s prices climbed 15 per cent.

Last month, UAE Minister of Economy Sultan bin Saeed Al Mansouri, said that he expected inflation in the UAE of between one and 1.5 per cent this year.

issacjohn@khaleejtimes.com