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Housing, education hurt savings of Dubai residents

Dubai: The price increases in housing and education sectors in Dubai during the first eight months of 2016 may have hurt the savings of the people in the emirate.

Housing rentals increased by 3.8 percent and education fees went up 5.9 percent in Dubai this year, Gulf News quoted the Dubai Statistics Center (DSC) report.

“Levels of price increases vary by emirate and by sectors. In Dubai, housing and education account for the lion share of expats’ costs, and both have seen the largest price increases,” Nikola Kosutic, research manager at global consultancy Euromonitor International, reportedly said.

He explained that both sectors account for the highest share of expenses, putting an additional financial burden on many families’ budgets.

“The situation, however, is improving due to the increasing availability of more affordable housing as well as improving infrastructure, which allows people to live in more distant and cheaper areas,” Koustic was quoted as saying.

The fluctuating fuel prices in the UAE, however, had no significant impact on inflation rates, the report said.

Koustic explained that consumer expenditure on operation of personal transport equipment accounts for three percent of total consumer expenditure in the UAE.

According to the Federal Competitiveness and Statistics Authority, inflation in the UAE remains at low levels with 2016’s annual rate estimated at 1.5 percent, a slight increase from the average rate of 1.18 percent seen over the last three years.

Nikola Koustic, research manager at global consultancy Euromonitor International, reportedly pointed out that the highest inflation rates in the first eight months of 2016 were observed in Dubai (1.9 percent) and Abu Dhabi (2.6 percent), while Ras Al Khaimah was the only emirate where consumer prices declined by 0.5 percent.

The average disposable income in the UAE is forecast to increase in 2016. However, there are great variations in increase rates between people in different socioeconomic classes, reported Gulf News.

According to Euromonitor’s ‘Income and Wealth Distribution Model’, the number of people earning Dh9,175 per month or less in 2016 is expected to decline, while the number of people earning more will increase, Koustic reportedly said.

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