Abu Dhabi's "Expected Inflation" seen hovering around 2.5 percent during Q2

Abu Dhabi (WAM): In the desire of Statistics Centre - Abu Dhabi (SCAD) to present unconventional indicators as demonstrated by the Centre's recent similar initiatives, e.g. "Personal Inflation Calculator" and "Purchasing Power Calculator", SCAD issued yesterday a new indicator the "Expected Inflation Rates". The report provides an analysis of the results of the CPI for the month of March and the first quarter of 2014, detailed by household welfare levels, by household type and geographical region, with the base year 2007. The report also presents the expected inflation (for the first time) for the second quarter and the first half of 2014. Butti Al Qubaisi, SCAD's Director General, reiterated the Centre's commitment to adopt innovative ideas in order to maximise the usefulness of its database, adding that knowledge of the expected inflation rate would directly impact people's lives and place them in a better position to deal with the present and future of trends of the economy. The expected inflation is a highly significant indicator that can give insights into the future for monetary policy makers. In the compilation of the new index, SCAD's experts analysed the historical price data of a long time-series at the level of the main expenditure groups and subgroups of the consumer basket, corrected the data or seasonal changes, and then calculated the expected inflation rate for the second quarter and the first half of 2014 in Abu Dhabi region. It is worth noting that the expected inflation rates should be treated as statistical forecasts. The actual figures may turn out to be above or below these forecasts, in the event of abrupt unforeseen prices changes. As the report indicates, consumer inflation for the Q1 2014 was 2.3 percent, compared with the same period of 2013, as shown by the increase in the CPI to 126.3 points during the first quarter of 2014, up from 123.4 points during the same period of 2013. This rise in prices reflects the net change or the outcome of upward and downward movement in the prices of the consumer basket during the periods compared. Expected inflation Compared with Q1 2014, the CPI is expected rise marginally (by 0.4 percent) to 126.7 points in Q2 2014, expected for the second quarter and the first half of 2014 has been determine, with a corresponding slight increase in consumer inflation from 2.3 percent in Q1 2014 to around 2.5 over Q2 2014. As for inflation during the period between January - June 2014, the actual CPI results for the period between January- March 2014 and the estimates for the period between April- June 2014 suggest that the average CPI in the first half of 2014 will be around 126.5 points. Accordingly, the estimated annual inflation for the first half of 2014 is expected to be around 2.4 percent. Consumer Prices during Q1 2014 As SCAD's report reveals, the "Housing, water, electricity, gas and other fuels" group accounted for the largest rise in the index during the first quarter of 2014 compared with the same period of 2013, contributing 31.1 percent of the overall change, due to increases in the prices of most the subgroups of this group. The second largest contributor to the overall increase in the CPI over the first quarter of 2014 was "Food and beverages", which contributed 22.0 percent of the change, the group's rose by 2.9 percent y-o-y during first quarter of 2014. The next largest contributor to the overall change in consumer prices during Q1 2014 compared with the same period of 2013 was the "Clothing and footwear" group, which accounted for 12.6 percent of the overall increase occurring between the aforesaid periods. Another significant increase was observed in the prices of the "Restaurants and hotels" group, which grew by 5.6 percent during the first quarter of 2014 compared with the same period of 2013. This group contributed 10.2 percent of the total increase recorded by all groups between the two periods under review. Consumer Prices during March 2014/2013 Average consumer prices increased by 2.4 percent in March 2014 compared with March 2013, with the CPI reaching 126.4 points in March 2014, up from 123.5 points in March 2013. This increase in prices reflects the net movement (increases and decreases) in consumer prices between the periods compared. The most significant increases, during March 2014 compared with March 2013, were observed in the "Housing, water, electricity, gas and other fuels" (up 2.7 percent), the "Restaurants and hotels" group (up 6.7 percent) followed by "Clothing and footwear" (up 3.2 percent), "Miscellaneous goods and services" (up 5.2 percent) and "Furnishings, household equipment and routine household maintenance" (up 3.9 percent). Consumer Prices during March/February 2014 The average consumer prices increased by 0.1 percent in March 2014 compared with February 2014. This overall increase in prices between the two months reflects the net movement (increases and decreases) of consumer prices during the periods compared. Consumer prices during Q1 2014 detailed by Household Welfare levels: The rise of 2.3 percent rise in consumer prices during the first quarter of 2014 compared with the same period in 2013, resulted in an increase of 1.8 percent in consumer prices for households of the bottom welfare quintile for the same period of comparison. The corresponding rise for other welfare levels was 2.4 percent for households of the top quintile and the middle quintile. Consumer prices during March 2014/2013 detailed by Household Welfare levels: The rise in consumer prices in March 2014 by 2.4 percent compared with March 2013 pushed up prices for households in the bottom welfare quintile by 1.2 percent and top welfare quintile by 2.6 percent, while prices increased for households in the middle quintile by 2.3 percent. Consumer prices during March 2014/2013 detailed by Household Welfare levels: During March 2014, consumer prices increased by 0.1 percent compared with February 2014. This caused an increase of 0.3 percent in consumer prices for households in the top welfare quintile. Consumer prices during Q1 2014 detailed by Household Type: The 2.3 percent rise in consumer prices for the first quarter of 2014 compared with the same period of 2013, pushed up consumer prices for citizen households by 2.4 percent, for non-citizen households by 2.3 percent and for share households by 2.0 percent. Consumer prices during March 2014/2013 detailed by Household Type: The 2.4 percent rise in consumer prices for March of 2014 compared with the same period of 2013, pushed up consumer prices for citizen households by 2.5 percent, non-citizen households by 2.4 percent and share households by 1.4 percent. Consumer prices by Region As SCAD's report reveals, 2.3 percent increase in the CPI in for the first quarter 2014 compared with the same period of 201 3, resulted in an increase of 2.3 percent in the CPI for Abu Dhabi and Al Ain an increase of 2.4 percent for Al Gharbia region. The increase in the CPI in Abu Dhabi Region contributed 67 percent of the total increase achieved during the first quarter, Al-Ain Region contributed 25 per cent while Al Gharbia region contributed 8 percent of the total increase achieved during the period. Consumer Price Index - Abu Dhabi Region The inflation rate in the Abu Dhabi region was 2.3 percent in the first quarter of 2014, compared with the same period of 2013. The inflation rate in the Abu Dhabi region increased by 2.5 percent in March 2014, compared with the same month in 2013. The CPI increased by 0.2 percent in March 2014, compared with February 2014. The major groups that increased in March 2014 compared with February 2014 were "Housing, water, electricity, gas and other fuels" by 1.2 percent, "Miscellaneous goods and services" by 0.4 percent and "Transport" with an increase of 0.5 percent. Consumer Price Index- Al Ain Region The inflation rate in the Al Ain region was 2.3 percent in the first quarter of 2014, compared with the same period of 2013. The inflation rate in the Al Ain region increased by 2.4 percent in March 2014, compared with the same month in 2013. The CPI decreased by 0.1 percent in March 2014, compared with February 2014.The major groups that decreased in March 2014 compared with February 2014 were "Food and beverages" by 2.0 percent. Consumer Price Index, Al Gharbia Region The inflation rate in the Al Gharbia region was 2.4 percent in the first quarter of 2014, compared with the same period of 2013. The inflation rate in the Al Gharbia region increased by 2.5 percent in March 2014, compared with the same month in 2013. The CPI decreased by 0.2 percent in March 2014, compared with February 2014. The major groups that decreased in March 2014 compared with February 2014 were "Food and beverages" group by 2.3 percent. – Emirates News Agency, WAM