Food and commodity inflation in the United Arab Emirates should ease this year after the Gulf state imposed price controls, but global trends will continue to drive prices, the Ministry of Economy said.

The ministry has signed agreements with a number of supermarket chains in the second-largest Arab economy this year to keep prices of several basic food items at 2007 levels after inflation hit a 20-year peak of 11.1 per cent last year.

The UAE also ordered a country-wide lifting of customs duties on cement and steel in March to stabilise construction costs.

'When it comes to food and commodities, there will be a positive impact on inflation from [these agreements],' ministry under-secretary Mohammed Abdul Aziz Al-Shihhi told reporters on Thursday.

Food, beverage and tobacco prices rose 5.6 per cent last year, while rents jumped 17.5 per cent, according to official data released last month.

Asked if overall inflation would decline, Shihhi said: 'Hopefully. But the trend globally doesn't look promising. It is too early to make a prediction now.'

'About 56 per cent of inflation last year was from rents, which is out of our control,' he added.

Analysts polled by Reuters in May said they expected UAE inflation to rise to 11.8 per cent this year.

Soaring food prices are a main driver of inflation across the world's biggest oil-exporting region, where most states, including the UAE, peg their currencies to the ailing dollar, which raises import costs.

The UAE economy ministry would soon unveil other measures to protect consumers from rising prices, but would continue with a no-subsidy policy, Shihhi added, without giving details.-Reuters