Dubai inflation rose to 0.4 percent on an annual basis in January.
However, the living costs in the emirate fell slightly from the previous month due to a drop in food prices, data by Dubai Statistics Center shows.
Annual inflation in United Arab Emirates member hovered below 1 percent for most of 2010 as lending and the property sector remained weak, following debt problems experienced by some Dubai state-owned companies, although trade has picked up strongly.
Inflation was 0.3 percent in December, putting the full year figure at 0.6 percent after 4.0 percent in 2009. Inflation eased to 0.5 percent in January.
Overall outlook remains stable and projects low single-digit inflation b y the end of the year.
In January, consumer prices decreased by 0.1 percent, after a 0.3 percent fall in the previous month according the data.
Inflation in the UAE eased to 1.6 percent in January, according to data from the previous month, helped by government initiatives to decrease food prices.
Real estate costs rose 0.1 percent month-on-month in January, after staying flat in the previous month. Analysts expected continued supply of new housing to keep rents in check.
Food prices in Dubai, which has been spared the civil unrest that has brought North Africa to the brink of civil war plunged 1.6 percent in January, the second monthly drop in a row.
Transport costs rose by 0.3 percent month-on-month.
Reuters poll shows analysts forecasting annual inflation in the UAE at 2.8 percent in 2011.
