The rate of annual inflation in the United Arab Emirates edged lower to 1.2 percent in March following a drop in food and transport costs, official data showed on Sunday. The 0.3 percentage point fall in the rate was the fourth monthly decline in a row, data from the National Bureau of Statistics showed.
Consumer price growth in the world's third largest oil exporter hovered close to 1 percent for most of 2010 as the debt woes of Dubai state-owned companies depressed bank lending and the once-booming property sector remained weak.
Food costs, which account for 14 percent of the basket, dropped by 0.4 percent month-on-month in March, after a 0.1 percent rise the previous month.
The UAE said in March it would start subsidising rice and bread in April until the end of the year to combat rising food prices.
"Price control measures typically tend to have temporary success, creating pent-up pressure," Gokkent said. "At some point, firms will pass on higher costs to consumers."
Housing prices, the largest consumer expense at over 39 percent of the basket, fell by 0.4 percent in March, after a 0.6 percent drop in February. Transport costs decreased by 0.5 percent.
In March, the country's central bank governor said inflation was not a worry, adding that he saw consumer price rises ranging around "very low" single-digit rates.
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