In the UAE, Cost of Living Has Greatly Diminished
Food prices in the UAE have shown a drop compared to the prices for the same period last year. According to Dr Cedwyn Fernandes, economist, pro-vice chancellor and director of Middlesex University Dubai, global food prices are showing a descending trend and the FAO Food Price Index has descended by 3.6% in comparison to March 2018. The trend is neutral and the prices of food are not likely to rise internationally.
Dr Fernandes stated that in the UAE, food prices have shown a slight decrease of 0.74% when compared to March 2018, a consideration of the weak demand conditions.
In the UAE, whether VAT affected the price? Application of VAT in January 2018 coexisted with the deflationary tendency in fuel and commodity prices globally and saturation of housing supply in the UAE. As a result, the effect of VAT has not been mirrored on prices in the UAE.
Other good news is that the cost of living has also fallen in the UAE in comparison to last year. The Consumer Price Index (CPI) has plummeted by 2.5% in March year on year.
The primary reason for this is the decline of 5.27% in transportation and 6.54% in housing costs. Both these factors total 48.7% of the CPI basket of goods and services. In effect, living costs in the UAE have fallen lessening the burden on the consumer.
On fuel prices, Dr Fernandes stated that in comparison with March 2018, transportation costs decreased as fuel prices were lower this year. The trend of fuel pricing not rising considerably is probably to continue till geo-political factors influence on oil producing nations, pushing up prices.
The UAE Government at the federal level and in each of the emirates has taken steps to curtail government fees and related costs that must be continued to belie any effect on higher fuel prices and even boost the business environment