In the 1970s, you could buy three pounds of water for one dirham, one sock of rice for 2 Dhs, and a new car for 9000 Dhs. Clearly, we've experienced inflation which makes us notice the differences between the prices before and now. That's why we choose "inflation in UAE" as a topic for our research, we testify a huge inflation in our foods, transports, clothes ... etc.
What does inflation mean? What causes inflation? How does it affect our standard of living? This research will shed some light on these questions and other aspects of inflation.
# Difintion and Causes:
Inflation is a rise in the general level of prices over time. It may also refer to a rise in the prices of a specific set of goods or services.
* Main reasons of inflation:
Rising rents, fuel costs and liquidity in the local markets
The dollar's decline so it’s affected the price of food and services.
UAE government has kept its dirham pegged to the dollar until now!!
The Purchasing power of the Dhs become low.
Higher oil prices}} imports more expensive
31.5% increase in the price of fuel products in 2005 led to an increase in production prices
The rise in demand for real estate caused by the country’s economic growth
UAE government increase the salaries so the demand increases.
Sheikha Lubna Al-Qasimi, UAE Minister of Economy, said a 31.5% increase in the price of fuel products in 2005 led to an increase in production prices, which eventually elevated and directly affected the UAE’s inflation rate.
Other reasons behind the increase in the price of goods and services was the rise in demand for real estate caused by the country’s economic growth, she added.
Sheikha Lubna said the weak US dollar also affected the price of products and services, due to its impact on UAE exports.
The minister assured that the Ministry of Economy was working to reduce inflation growth through mechanisms such as the consumer protection unit, formed last...