The inflation rate in Abu Dhabi reached 4.3 per cent in February 2018, the second highest rate in years as prices rose following the launch of Value-Added Tax (VAT) across the UAE.
The inflation rate is slightly lower, however, than that in January 2018, which reached 4.7 per cent. The rates in the first two months of the year compare to an average inflation rate of 1.6 per cent in 2017 and average of 2 per cent in 2016, according to Gulf News calculations.
The increase followed the implementation of a 5 per cent VAT introduced on January 1, 2018, and the roll-out of a excise tax on tobacco and sugary drinks from October 1, 2017.
According to figures released on Sunday by the Statistics Centre Abu Dhabi (Scad), the rise in the Consumer Price Index (CPI) in the first two months of 2018 was driven mainly by transport prices, which rose 12.5 per cent year-on-year. The transport category accounted for nearly 38 per cent of the overall increase in the CPI.
The next largest contributor to the increase was the food and beverages category where prices went up 6.3 per cent.
The prices of housing, water, electricity, gas, and fuel continued to drop, Scad said, reflecting a 2.7 per cent decline in house rents during that period.