Cost of living drops in Abu Dhabi as consumer price index falls

Abu Dhabi: The Statistics Centre Abu Dhabi (SCAD) has released their consumer price indices for January to August 2019 – in comparison to the same period in 2019.

Their study shows that cost of living has actually dropped in the emirate of Abu Dhabi given that the Consumer Price Index (CPI) has fallen.

What is CPI

The Consumer Price Index is a measure that analyses the weighted average of prices of a basket of consumer goods and services. It looks at each item, its relevance to the total weightage and its contribution to increase/decrease in the total basket of expenses.

The CPI is compiled on a monthly basis, within 12 working days from the end of the reference month. CPI decreased by 1.2 per cent in August this year compared with August 2018.

What contributed the most in lower CPI?

‘Housing, water, electricity, gas and fuels’ is the item in the price basket of residents in Abu Dhabi that contributed the most to having a lower CPI this year. This item which includes rent, utilities and fuel has the highest weightage or relevance (31.2 per cent) to a resident’s expenditure and it dropped by 3.6 per cent this year when compared to 2018.

Another high-weightage expense that went down this year is ‘Transport’. This cost has reduced by 6 per cent and has a 14 per cent weightage out of total expenses.

Biggest increase in 2019

‘Recreation and Culture’, an item with less than 5 per cent weightage, actually went up by over 14 per cent this year, making it the biggest increase on the CPI data table. Expenses under ‘Restaurants and Hotels’ and ‘Tobacco’ also registered increases of over 4 per cent in comparison to last year.

No change

‘Health costs’ stayed static with no change according to the SCAD data.

In total

Looking at the whole picture, there is a cumulative drop of 0.8 per cent on CPI figures. Inflation rates have also dropped drastically with July and August showing a drop of 1.4 and 1.2 per cent – in comparison to as high as 3.8 and 4.1 per cent in the same months in 2018.