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UPDATE 1-UAE inflation hits 9-yr low in 2009

Published 02/07/2010, 03:50 AM
Updated 02/07/2010, 03:51 AM

* Inflation 1.5 pct y/y in 2009 vs 12.3 pct in 2008

* Consumer prices -0.4 pct y/y in Dec vs 0.17 pct in Nov

* Prices -0.7 pct m/m vs +0.4 pct-preliminary data

(Adds details, background)

By Martin Dokoupil

DUBAI, Feb 7 (Reuters) - United Arab Emirates inflation hit a nine-year low of 1.5 percent in 2009, in line with forecasts, as prices returned to a downward path in December due to a fall in a household category, preliminary data showed on Sunday.

The global financial crisis ended an oil- and real estate-fuelled boom in the Gulf Arab region, depressing consumer prices from 2008 record peaks, with some countries such as the UAE experiencing temporary deflation in 2009.

The Gulf country's consumer prices fell 0.4 percent on an annual basis in December, after an increase of 0.17 percent in November, data from the National Bureau of Statistics showed.

On the month, prices in the world's third-largest oil exporter decreased 0.7 percent in the last month of 2009, after rising 0.4 percent in November, the data showed.

The bureau said decline in the key household category, which accounts for 39 percent of the inflation basket, was behind the December fall, while food prices edged up slightly. It did not give details.

The second-largest Arab economy, which saw four months of consecutive price declines before November's rise, registered record annual inflation of 12.3 percent in 2008.

Analysts polled by Reuters expected an average inflation of 1.5 percent for the full year of 2009. Inflation should accelerate to 2.5 percent this year as the economy recovers from the last year's downturn.

The oil producer's economy minister said in December he expected annual consumer price inflation of 2 percent for 2009. The UAE central governor said in January the country would see a very low inflation for even more than one year.

(Editing by Bill Tarrant)

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