Grocery items such as bread, cheese, fruits and vegetables and soft drinks are much more economical in the UAE than in the US and European countries.
This is thanks to the government’s push to freeze prices, low fuel prices, increased local production of perishable goods and stronger dirham making imports cheaper.
Local retailers and economists say that prices of some of the goods such as fruits and vegetables are cheaper by over 50 per cent in the UAE as compared to some developed countries due to low taxes in the country.
Globally, inflation has been a challenge for governments. While the rest of the world has suffered from skyrocketing food and fuel prices, UAE has relatively seen lower levels of inflation when compared to its developed market peers.
Inflation in the UAE stood at 6.77 per cent, lower than nine per cent in the European countries and nearly at par with the US at 6.5 per cent.
Of late, the Philippines and Pakistan have seen shortages of onion, wheat and other commodities, resulting in massive increases in prices in those countries.
In the UAE, currently, almost 60 per cent of the consumer price index (CPI) basket comprises housing (utilities), transport and food costs.
UAE consumers to feel the benefit of the price drop
Simon Ballard, chief economist, First Abu Dhabi Bank, said inflation is still a global challenge but less of an issue for the UAE and other Gulf countries.
Dr Dhananjay Datar, Chairman and Managing Director, Al Adil Trading, said grocery prices are likely to drop further due to a drop in freight rates and the strengthening of the dirham.
“Generally, it takes around two months for prices to filter down to the consumers. Since freight rates have dropped over the last few months, now prices are coming down and UAE consumers will soon realise the price drop. Plus, there is huge competition, hence, companies are looking to sell at lower prices. Production of commodity products has been very good and this will reflect in prices February and March 2023 prices for the UAE consumers,” he said.
Dr Datar expects residents will benefit from the drop in prices of rice, cooking oil, wheat, pulses, spices, tea, coffee and cereals in the coming months.
Prices in UAE are cheaper by 70 per centSource: