OPEC Monthly Oil Market Report – October 2017
Inflation in the
United Arab Emirates
(UAE) eased from nearly 3.0% y-o-y in March to 1.2% y-o-y in July. In
June, inflation stood at 2.0% y-o-y. The decrease in the prices of transportation, textiles and clothing,
together with housing, water, electricity and gas, alongside furniture and household goods, was behind the
fall in the overall index. The subcategory of housing, water, electricity and gas showed a decline from 1.0%
y-o-y in June to 0.9% y-o-y in July. The prices of textiles and clothing witnessed a drop of 1.2% y-o-y in July
from an increase of 1.0% a month earlier. Transportation prices also declined by 1.1% y-o-y in July vs. an
increase of 5.1% in June. Most other categories of consumer prices were largely stable in July.
Expansion in the country’s non-oil private sector continued in September, though at a slightly slower pace,
following August’s quickest pace of expansion since February 2015, according to the Emirates NBD UAE
PMI. The index stood at 55.1 in September, down slightly from 57.3 in August. The survey showed a sharp
expansion in output and new business. The average reading of the index for 3Q17 was the strongest in two
years, highlighting solid domestic demand for goods and services produced in the country’s non-oil private
sector and robust economic growth in 3Q17. In August, new export orders increased for the first time in three
months. However, new export orders contracted in September and most of the new orders inflow came from
the domestic market.
Graph 3 - 36: UAE manufacturing PMIs
Graph 3 - 37: UAE inflation
, consumer price inflation posted a 3.7% y-o-y increase in September, which is down slightly
from a 3.8% y-o-y increase in August and the lowest inflation rate in six months. The Bank of Indonesia’s
policy rate was lowered to 4.25% in September from 4.50% a month earlier. Trade was supportive to growth
in 2Q17 as the net exports of goods and services climbed by more than 36% y-o-y. While exports increased
by 3.4% y-o-y in 2Q17, imports posted a slow increase of only 0.6% y-o-y. GDP registered growth of 5.0%
y-o-y in 2Q17, similar to 1Q17. GFCF accelerated to 5.4% y-o-y growth in 2Q17, up from 4.8% in 1Q17. The
growth of household consumption expenditure was unchanged from 1Q17 at nearly 5.0%. However, general
government consumption expenditure dropped by 1.9% y-o-y in 2Q17, compared to a 2.7% growth in the
, GDP growth slightly accelerated in 2Q17 compared to 1Q17. GDP grew by 6.5% y-o-y in
2Q17, up slightly from 6.4% in the previous quarter. Government consumption expenditure had a notable
increase of 7.1% y-o-y, up significantly from 0.2% in the previous quarter. This represents the fastest pace of
growth since 2Q16. Private consumption expenditure, on the other hand, slightly increased to 5.9% y-o-y
growth in 2Q17 from 5.8% in 1Q17. Expansion in GFCF also slowed from 14.7% y-o-y in 1Q17 to 9.4% in
2Q17. Changes in imports were minor, rising marginally from 18.6% y-o-y in 1Q17 to 18.7% in 2Q17. Growth
in exports, however, dropped slightly from 20.3% y-o-y in 1Q17 to 19.8% in 2Q17.
Sources: Emirates NBD, IHS Markit and Haver Analytics.
Sources: General Authority for Statistics and Haver Analytics.
% change y-o-y