Economists confirmed that there are positive effects on the national economy and consumers, as a result of low inflation during the first seven months of this year.

They pointed out that many consumers have benefited directly from the decline, especially with regard to housing, rental values, and foodstuffs due to offers and discounts in the markets, pointing out that the high cost of education reduced the sense of low inflation.

In the first seven months of this year, consumer price inflation declined significantly by 1.09 percent to 2.5 percent compared to the same period in 2018.

Inflation is defined as the continuous rise in the general level of prices and in turn reduces the purchasing power of individuals in terms of the quantity of goods and services.

Inflation eased

In the first seven months of this year, consumer price inflation declined significantly by 1.09 percent to 2.5 percent compared to the same period in 2018, according to statistics from the Federal Competitiveness and Statistics Authority.

These statistics showed that year-on-year inflation declined in January 2019 by 2.4%, compared with January 2018, then decreased in February and March 2019 by 2.5% each, compared to the same two months of 2018, to continue the decline in April 2019 by 2.09%, and in May fell 1.09%, and fell 1.5% in June 2019, compared with June 2018, and 2.2% in July, compared with July 2018.

Positive effects

The head of the training department at the Arab Monetary Fund, Dr. Ibrahim Karasneh, said that many consumers, especially residents, felt low inflation, and benefited directly from this, especially in relation to the decline in housing prices and rental values, and food prices, as a result of offers and discounts Markets.

He added that a large number of residents moved to cheaper or better housing, with the same rental values ​​they were paying before the decline.

The continuing high cost of education, which is a major part of the budget for almost all the population, has reduced the sense of low inflation, as well as higher spending on entertainment, restaurants and hotels, he said.

He pointed out that low inflation has positive effects in the economy, as it contributes to increase the rates of growth of the national economy, increase foreign investment, and support the value of the dirham against foreign currencies, pointing to the risks of very low inflation, because it means the presence of economic recession, which affects employment and employment And leads to dependence on corporate taxes, reducing government revenue in some cases.

Facilities and competition

For his part, said the economist, Basil Abu Tuaima, that a large number of consumers felt the decline in inflation, which reflected on the prices of many food and consumer goods, as a result of the large facilitation of investors, and facilitate the granting of trade licenses, which increased sales outlets and chains, and raise the intensity of competition between them In the interest of consumers, as well as the competition of electronic stores for «traditional», which increased choices for consumers, and led to lower prices.

He added that the decline in housing prices and rental values, in light of the increase in real estate supply, contributed to the consumer benefit from lower inflation, in addition to the increase in the number of medical centers, competition between them, and not to increase the cost of medical services in general.

He pointed out that the high cost of education, in particular, played a role in not taking advantage of the low inflation, explaining that the reduction of random increases in fees, and the tendency to establish model schools for low-income, will have a significant role in reducing the cost of education.

Abu Taima said that consumers' feeling of low inflation will grow, provided that there are no increases in the rates and values ​​of value-added taxes, which consumers currently bear.

Entertainment and culture

Reza Musallam, general manager of Truth Economic Consultancy, said the continued rise in fees for a large number of schools has increased the burden on consumers.

He added that despite the decline in housing prices and rental values, during the current year compared to last year in tangible proportions, the lack of lower prices of water, electricity and gas, reduced the impact of the decline in rents and housing prices, as well as the absence of a realistic decline in the prices of many transportation, affected by the decline World oil prices.

He pointed out that the decline in inflation, during the first seven months of this year was not absolute, but came as a result compared to the same period last year.

He stressed the importance of lower prices for «Entertainment and Culture Group», which has seen the largest increase in prices this year, as well as the prices of restaurants and hotels, to be accessible to a larger population.

Consumer Goods

Retail trade expert Ibrahim al-Bahr said that although intense competition in the consumer market in particular led to good discounts and discounts, consumers needed further declines in housing, food, water and electricity prices. Health and education services, so as to reap the benefits of lower inflation, especially since the decline was compared to the same period last year, and not at all.

The sea agreed that the low cost of education, which accounts for nearly 30 percent of household expenditures, deprived consumers of the full benefits of reducing inflation.

The sea demanded to reduce the prices of entertainment services, restaurants and hotels, especially with the emergence of the UAE as a distinct tourist destination.

4 main groups

A reading of statistics issued by the Federal Authority for Competitiveness and Statistics showed that there are four commodity groups, which caused the decline in inflation rates almost all months, as a result of falling prices in varying rates, the first: «Transport Services Group», which ranged in the decline in the price of services between 1.6 and 7%, Housing, Water, Electricity and Gas Group, whose prices ranged between 4.9 and 6.5%, the Food and Beverages Group, whose prices ranged between 0.7 and 2%, and the Health Services Group, which decreased between 0.06 and 0.2%. .

On the other hand, six commodity groups witnessed a rise in their prices in different rates: «Recreation and Culture Group», which saw increases of between 3.3 and 21.7%, «Education Group», which increased between 1.2 and 1.4%, and «Group Household appliances, which rose between 1.2 and 3.6%, the “Restaurants and Hotels Group”, which recorded increases of between 1.5 and 5.4%, “Tobacco”, which increased between 0.6 and 2.7%, and “Telecom Group” »Gains ranged between 0.09 and 0.6%.

The prices of "Miscellaneous Goods and Services" and "Clothing and Footwear Group" fluctuated in the first seven months of this year.

- Inflation rates have fallen by rates

Between 1.09 and 2.5%, during the first seven months

From 2019.