Inflation & Consumer Price Index Analysis for UAE

The Trend in Inflation - UAE

Inflationary (or deflationary) spirals as measured by CPI and GDP deflator over the period 2008 to 2020 are presented in figure 3.

It is observed that the percentage change in GDP deflator exhibits higher volatility as compared to the percentage change in CPI. The inflation as measured by CPI was highest in 2008 whereas it reached as low as 4.07 percent in 2015.

On the other hand, the GDP deflator showed the highest level of inflation of 18.53 percent in 2008 which declined to a staggering -15.2 percent in 2009.

Inflation measured by CPI exhibits an overall decreasing trend whereas a mixed trend can be observed in the case of the GDP deflator.
In line with Qatar and Saudi Arabia, a trend in the GDP deflator of UAE also chases the movements in global oil prices.

As measured by the GDP deflator, the country faced deflation of -15.2 percent, -15.4 percent, and -4.4 percent whereas CPI showed 1.6 percent, 4.1 percent, and -1.9 percent in 2009, 2015 and 2019 respectively.

The varying composition of the GDP of UAE also magnifies the difference between inflation measured by the GDP deflator and that of CPI. For instance, ‘Mining and Quarrying’ accounted for 26 percent which was reduced to 17.2 percent of UAE’s GDP.

Although inflation measured by the GDP deflator appeared more volatile than that of CPI, however, the difference between the two series decreased during the last couple of years. 

read More
Source: World Bank