Abu Dhabi rent cap is expected to bring down the inflation across the country. Standard Chartered Bank has slashed its UAE's 2007 inflation forecast to 7.30 per cent from 9.60 per cent.
Abu Dhabi's rent cap aims to avoid cost-of-living pressures and is lower than its own forecast of an 18 per cent increase in rents next year.
Inflation is expected to fall to 7.30 per cent in 2007, down from 13.80 per cent in 2006, according to Steve Brice, regional head of research, Standard Chartered Bank. An inflation survey released in September in the GCC countries revealed that the 2005 and 2006 inflation was much higher than official estimates.
Abu Dhabi's move to cap rent increase at seven per cent in 2007 has had an impact on the inflation outlook.