They attribute it to the high food prices and the prevention supplies from "Corona"

Consumers: Declining inflation did not cut household spending during the first half

  • Coronavirus prevention supplies witnessed significant price increases during the first months of the pandemic. Emirates today

  • Ali Al-Hamoudi: "The impact of lower inflation on consumers is determined according to spending priorities."

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Consumers said that the high prices of foodstuffs, and the emergence of new items in family spending related to the "Covid-19" pandemic, such as sterilizers, gloves and masks, reduced the benefit from the lower prices of the "housing and transportation group" during the first half of this year, in addition to the lower prices of groups Restaurants, hotels, transportation, household appliances, communications, culture and entertainment during the last four months.

In turn, two economists said that the impact of low inflation varies from person to person, according to his personal budgets, and is determined according to spending priorities.

The consumer price index, or what is known as inflation, continued to decline on an annual basis during the first half of 2020, compared to the first half of 2019, at rates ranging between 1.3% and 2.7%.

Rising prices

In detail, consumer Hoda Al-Kathiri said that she noticed an increase in the prices of some foodstuffs, such as vegetables and fruits, and some types of meat and cheeses, in addition to the prices of some clothes, shoes and preventive supplies related to the Corona virus, such as sterilizers and gloves, referring to a decrease in the prices of masks. Great, about a month ago.

In turn, consumer Ahmed Radi said that despite the reports showing the decline in consumer prices, he did not find a reflection of this on the special price levels in many goods and services.

He stressed that the decrease in rental values ​​is the most influential, especially as housing accounts for a large part of family spending, pointing to the decline in transportation prices, as a result of the decrease in fuel prices.

He added that despite the decline in its spending on housing and fuel, it did not achieve the expected benefit in savings, due to the increase in food spending, the increase in the prices of some restaurants, as well as spending on goods that were not within the budget before, while spending on them is large. Since the emergence of the "Covid-19" pandemic, such as masks, sterilizers and gloves, and the increase in spending on personal care supplies.

Rental values

In the same context, consumer Maher Karam said that the rental values ​​of housing have decreased significantly, and the monthly spending on transportation has decreased, as a result of the decrease in fuel prices globally and locally, at a time when the prices of other commodities have increased and that part of the spending has been directed.

Karam pointed to the increase in the prices of some foodstuffs, especially some varieties of vegetables and fruits, in addition to the high prices of clothes and shoes in general, except in offers and temporary price reductions, at a time when spending on education remained unchanged.

Hotels and leisure

As for consumer Mahmoud Sarhan, he believed that prices remained unchanged for most of his basic goods and services, at a time when the prices of other goods increased.

He explained that the rental value of the apartment in which he lives in the Al Raha area in Abu Dhabi remained the same, despite the decline in the real estate rental market, and the prices of some foodstuffs remained unchanged, at a time when some varieties of vegetables, fruits, meats, and detergents witnessed varying price rises except for some Offers, referring to the increase in spending on supplies to prevent the Corona virus, especially as it witnessed significant price increases during the first months of the pandemic. He stressed that spending on hotels, restaurants and entertainment has decreased over the past months.

Spending on sterilizers

For his part, consumer Muhammad Hadi said that he witnessed a decrease in the housing item during the recent period, as he moved to a residence in Sharjah with a decrease in the rental value of more than 20%, compared to its predecessor, but he did not fully benefit from that in terms of savings, given that Spending higher on other items.

He pointed out that the prices of some foodstuffs, clothes, restaurants and cafes raised their prices recently, and spending on sterilizers, masks and gloves was a significant part of the family's budget, in light of their high prices during the first period of the pandemic significantly.

Hadi pointed out that tuition fees remained unchanged in most schools, with the exception of offers related to payment facilities, or exemption from the registration fee.

Accommodation and relocation

Consumer Amr Al-Amir agreed that the decrease in housing spending is the most obvious and influential item so far, despite the high prices of water and electricity, indicating that some taxi companies in Abu Dhabi have raised their prices during the recent period, despite the decrease in fuel prices.

He also pointed to the rise in the prices of clothes and shoes, excluding offers, pointing to the emergence of new commodities, such as protective equipment from "Corona", which acquired an important aspect of family spending.

Spending priorities

In addition, the economic and financial expert, Ali Al-Hammoudi, said that the impact of low inflation is not the same for all consumers, and is determined according to spending priorities.

He emphasized that the decline in housing and transportation prices is a positive factor in the interest of a large number of consumers in general, noting that the high prices of some materials, such as food, clothing, shoes and raw materials, which are used in many industries, have prevented consumers from benefiting more from the decrease in some Other items.

He continued: “These increases are understandable, and it is difficult to control them in light of the restrictions on supply chains, which have become less flexible, as a result of working conditions during the (Covid-19) phase, and the suspension of some production processes, as well as the addition of the cost of applying many precautionary measures to supply prices. ».

Al-Hammoudi pointed out that the presence of a new spending item, such as sterilizers, gloves and masks, with the state of uncertainty due to the lack of a vaccine for the virus, and the continuation of some private sector entities to lay off a number of employees, factors that affected the benefit from lower consumer prices.

Consumer Price Index

The consumer price index decreased by 1.3% in January 2020, compared to January 2019, and decreased by the same percentage in February 2020, compared to the same month in 2019.

And it decreased by 1.6% last March, compared to March 2019, to continue the decline, reaching 1.9% in April 2020, and it decreased at greater rates in May and June 2020, reaching 2.7% and 2.4%, respectively.

During the first six months of this year, reports issued by the Federal Competitiveness and Statistics Authority showed that the prices of the housing, water, electricity and gas groups continued to decline, and the prices of restaurants, hotels, transportation, household appliances, communications, culture and entertainment decreased during the last four months of the year. The first half, at a time when the prices of food, clothes and shoes increased, with a slight increase in the prices of education during the same period.

Low housing and transportation prices are a positive factor in the interest of a large number of consumers in general.

New spending items and the uncertainty due to the virus have taken a toll on lower consumer prices.

Abu Taima: Impact according to budget and spending

The economist, Basil Abu Taima, considered that the impact of low inflation on consumers varies from person to person, according to his personal budgets and his spending on different commodity groups. He said, "It is not a condition that low inflation makes all consumers feel the same retreat."

Abu Tameh pointed out that the lifestyle after the Corona pandemic varied among a large number of consumers, as new products appeared outside the established budget and had priority in spending, while these materials witnessed a significant increase in their prices at the beginning of the pandemic, which affected consumers, as well. Reporting that there are increases in other food and non-food items, as a result of the increase in global shipping prices, and the restrictions placed by some countries on exports. Abu Taima praised the government's great role in working to stabilize prices, by providing basic commodities and finding several alternatives to them, despite the unfavorable global conditions.

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