Higher inflation in UAE, GCC countries expected this year

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Higher inflation in UAE, GCC countries expected this year

UAE economists expect higher inflation in Gulf Cooperation Council (GCC) countries including UAE and the wider Middle East and North Africa region for the year 2022 due to increased prices of food and commodities with the Russia-Ukraine war. Emirates NBD Research reports a 4.3 percent increase this year in contrast to the initial projection of 2.3 percent, significantly higher than last year’s 0.2 percent average consumer price index. 2023 is projected to see 2.5 percent inflation in the UAE. Inflation in other Gulf countries will reach an average of 3 percent in Saudi Arabia, 3.5 percent in Qatar, 2.5 percent in Oman, 3.5 percent in Kuwait, and 3 percent in Bahrain. The increased inflation is attributed to the impact of the Russia-Ukraine war, affecting global food and commodity prices as well as the high crude oil prices. According to the observation of James Swanston, Capital Economics economist for the Mena Region, non-Gulf economies are likely to be more vulnerable from the Russia-Ukraine War and with their governments needing to cut several expenditures. Despite the projected inflation, Emirates NBD Research affirmed a strong 2022 start of the UAE economy, with crude oil production up 12 percent year-on-year in the first quarter and a solid expansion in non-oil sectors as well. KSO/Expat Media

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