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Input costs for UAE’s private sector businesses rose at the fastest pace in 74 months during January, primarily as a result of the rollout of value-added tax (VAT).

However, across the board, businesses were able to report a fairly strong start to the year, according to the latest Emirates NBD Purchasing Managers’ Index (PMI).

 

There were indications that businesses held back from passing on the full VAT-related cost inflation to consumers.

“While selling prices also increased in January, the survey suggests that the full rise in input costs was not passed on to consumers,” Khatija Haque, Head of MENA Research at Emirates NBD, said.

The introduction of VAT impacted both prices and purchases in January

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