IMF: UAE's consumer price index does not give the appropriate weight for housing

Gulf News:

Despite a slower increase in Dubai's residential rents from 30.1 per cent in the first quarter of 2005 to 17.1 per cent in the first quarter this year, a tweaking of the relative weights of the CPI may better reveal the reality of price hikes in the country.

Shaikha Lubna Al Qasimi, UAE Minister of Economy, earlier this year announced that the government intends to tackle inflation by further boosting competition. A shake-up in the competition laws is expected to materialise before the end of the year.

A reform of competition laws is needed, but let's be clear: weak competition is a cause of high prices, not a cause of inflation, i.e. rising prices.