Abu Dhabi, UAE: According to a report release recently the main cause of rising inflation in the Emirate of Abu Dhabi are escalating rents. The consensus is that these rising rents have engulfed all vital sectors of production and consumption, causing the prices of other goods and services to go up as well.

The report issued by the Abu Dhabi Department of Planning and Economy highlighted increases in housing rents, cost of production and prices of goods and services as the factors which pushed up the overall inflation rate 10.9% at the end of 2007 and to 11.5% in the first quarter of 2008.

The report further stated that, “The interest rates in the UAE domestic market are merely a reaction to external conditions and do not reflect the real internal situation.”

When compared to the first quarter of 2007 which saw an inflation rate of 10.7%, the current rate of 11.5% for the first quarter of 2008 represents a significant increase.