DUBAI (Reuters)
The price of basic foods in the United Arab Emirates surged 36 percent over the last year, in part because the dollar-pegged dirham declined, making some imports more expensive, the local Gulf news reported on Thursday.
The price of cooking oil soared 80 percent and basmati rice -- a staple for hundreds of thousands of south Asians working in the oil-producing country -- climbed 50 percent, the newspaper said after a survey.
"Food price inflation is a global phenomenon, but GCC countries are particularly affected because of their weak, dollar-pegged currencies," Eckart Woertz, an economist at Dubai-based Gulf Research Centre was quoted as saying by the newspaper. "If they revalue, food imports will become cheaper." Sugar prices rose 31 percent and eggs 19 percent, the newspaper said. Mutton prices more than doubled, it said.
The UAE is one of five Gulf Arab oil producers that peg their currencies to the dollar, forcing them to track U.S. interest rates at a time when U.S. growth is slowing and their own is surging on higher oil prices, fuelling inflation.
Together with Kuwait, they form the Gulf Cooperation Council, a loose economic and political bloc.
Across the Gulf, inflation is at a record or near it, prompting demands for the states to revalue their currencies or drop their dollar pegs altogether.
Inflation in the UAE, the world's fifth-largest oil exporter, probably accelerated to 10.1 percent last year, beyond a 19-year high, according to a Reuters poll of economists in December. |
