Dubai inflation accelerated in June, led by increases in food and transportation costs.
The inflation rate rose to 0.8 percent, the Dubai Statistics Center said in an e-mailed statement today. Food prices increased 6.7 percent while transportation costs rose 6.6 percent, the report said. In the month, prices increased 0.5 percent.
“Across the GCC, food prices are the major inflationary driver, with the exception of Saudi Arabia which is also seeing strong housing inflation,” Monica Malik, Dubai-based chief economist at EFG-Hermes U.A.E. Ltd, said in a telephone interview. “We expect to see government measures to limit food price rises increasing in the run-up to the holy month of Ramadan, when prices normally strengthen across the region.”
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 Organization said in March. Crude prices rose 15 percent last year and are up 6 percent this year.
The month long Islamic holiday of Ramadan, when Muslims fast from sunrise to sunset, begins in early August.
The Gulf Cooperation Council comprises Kuwait, Saudi Arabia, the United Arab Emirates, Oman, Qatar and Bahrain.