The United Arab Emirates inflation eased to 1.6 per cent on an annual basis in January and fell 0.3 per cent on the month mainly due to lower housing and food costs, data from the National Bureau of Statistics showed on Sunday.

Analysts expected prices in the world's third largest oil exporter to pick up gradually this year as the Gulf country recovers from Dubai debt woes.

The second largest Arab economy is seen expanding by 3.6 per cent this year after an estimated 2.3 per cent in 2010, lagging behind its regional peers due to impacts of Dubai debt restructuring.-Reuters