The graph of inflation, which has been very high since March 2008, came down during November 2008 and subsequently, brought the prices of food articles down.

The Department of Planning and Economy (DPE) Index said, with drop or stabilization in prices of food articles in November 2008, the inflation index in the UAE came down significantly, as reported by TheNational.

After analyzing a typical staple food basket, containing meat, vegetables, fish, fruits, eggs and bread in the index of the Abu Dhabi DPE, it was found that prices of 44% commodities on the index list dropped from the fourth week of November 2008 to the third week of December 2008. Besides, the prices of 12% of commodities remained stable and the remaining goods witnessed slightly upward movement.

According to the DPE index, per kilogram price of tomatoes dropped 31% and the fruit prices plunged around 7% to 8%. Flour prices also slipped down 4.4%, while seafood and fish prices witnessed a fall of 3.1%. But the prices of bread and cereal products flared up by 1% to 3%.

The inflation rate in the UAE touched a record high of 12% during March 2008, leading to a drop in demand. Moreover, the expenditure on food items by people declined owing to high prices, but now prices have started coming down. Another critical reason for high inflation rate is fluctuation in prices of imported food articles that affected the food market. But the prices of imported food items are now more stable.

Moreover, the department tried hard to control inflation that resulted in reduced food prices. The Ministry of Economy signed a number of agreements with leading marketing outlets to reduce the prices of primary articles.

According to a Research Analyst at RNCOS, “The prices of essential food articles in the UAE eased and future can see more such reductions in food prices. The government’s initiatives to rein inflation by signing agreements with retailers will help in keeping the prices under control. This will bring cheer to consumers who were badly hit by high food prices and inflation that consumed a big share of their income.”

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