Monday, 26 February 2018

Inflation To Rise 3.3 Percent In The UAE as VAT, Impact Oil Prices Economy

BMI said that the inflation is possible to increase 3.3 percent of the 5 percent value-added tax (VAT) since January in the UAE after that the higher oil prices will down for the goods and services dearer.

The newly prediction from the Fitch subsidiary is a revision of its earlier estimate for 2018 from $57 previously of 3.1 percent pricing is to $65 per barrel after BMI updated Brent.

The UAE VAT Report said that This will lead to an increase in transportation prices - 10 percent of the consumer price index basket that given fuel prices have been deregulated since 2015.The putting pressure on inflation so that higher oil prices will also support domestic demand.

The region's biggest economies Saudi Arabia and the UAE - introduced VAT in January to narrow damages that had to broaden over the last couple of years as oil prices fell from $115 per barrel in 2014 to just under $30 at the beginning of 2016.

The shortening of the oil market has also pushed through a more grumpy diversification programme in these economies, with Saudi Arabia, the world's biggest oil exporter looking at privatization initiatives that including the planned sale of a 10 percent stake in cash-cow Saudi Aramco this year.

 The BMI expected the UAE central bank to follow a tighter monetary policy, which is expected to increase interest rates this year.

The UAE calculation report said."The higher rates will help contain inflationary pressures, but will do little to reduce price stemming from fiscal measures and higher commodity prices,".

The UAE government is also expected to maintain it to the dollar -this year value against other currencies which has lost two and a half percent  - include the price of commodities including crude and gold.

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