The past month has brought further evidence that inflation is slowing across the MENA region. In Saudi Arabia, inflation now stands at its lowest rate in more than eight years, while price pressures have also eased in most of the other Gulf economies, as well as Egypt. The key factor underpinning this has been the fall in global food prices over the past year which has filtered through into weaker food inflation. The one exception to this trend has been the UAE where consumer prices are now rising at their fastest rate since early 2009. Although food inflation has also eased in the Emirates, housing costs have been pushed up as a result of the lagged impact of last year’s revival in Dubai’s housing market and the removal of caps on annual rent increases in Abu Dhabi.
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