DUBAI, May 16 (Reuters) - Consumer prices in Dubai fell at a 1.5 percent annual rate in April and 0.2 percent from March, extending deflation into a fifth consecutive month mainly due to a drop in food prices, data showed on Wednesday.
Dubai, one of seven United Arab Emirates, has seen prices fall by 1.4 percent on average so far this year in its deepest period of deflation since prices jumped by record 10.8 percent in 2008.
Annual falls hit 1.9 percent in March as the property market remains flooded with new residential units after a speculative bubble burst led to a $25 billion debt restructuring in a state-owned conglomerate in 2009-2010.
The month-on-month price fall in the Gulf trade and business hub was the smallest fall since December, the data released by Dubai Statistics Center showed.
Costs of housing including rents and utilities dipped by 0.1 percent month-on-month in April, which was the smallest decline this year. The item, which accounts for nearly 44 percent of consumer expenses in the coastal desert emirate, dropped by 1.3 percent in March.
Dubai house prices may finally stop falling this year, a Reuters poll showed this month, although a glut of oversupply will dog the market for some time and keep property developers away.
But food prices in Dubai’s $82 billion economy dived 1.6 percent in April compared with the previous month, the most in three months, while transport costs were flat, the data also showed.
In neighbouring Abu Dhabi, which accounts for almost all of the UAE crude production, inflation accelerated to a nine-month high of 1.8 percent in April with prices rising 0.2 percent month-on-month, data showed last week.
The UAE, one of the world’s top five oil exporters, is yet to release April inflation data for the whole federation.
Its hydrocarbon-reliant economy is expected to see a slower growth of 3.1 percent this year after an IMF estimated 4.9 percent in 2011 due to a global slowdown and weak domestic bank lending.