Inflation hits 17% in Qatar

Inflation hits 17% in Qatar source Gulf times
By Santhosh V Perumal
QATAR’S inflation reached a record high of about 17% in the second quarter of this year, mainly on skyrocketing food prices and abetted by high rents and gold prices.
The consumer price index of household consumption stood at 166.87 points in the second quarter of this year compared with 147.86 points in the year-ago period, translating into an inflation rate of 16.59%, according to the Qatar Statistical Authority.
The inflation rate for the first quarter was 14.75%.
The food, beverages and tobacco group index, which has 18% weight in the household consumption expenditure, surged 22% compared with 6.14% in the year-ago period, reflecting the impact of global food crisis on Qatar.
Of the eight major groups of commodities and services, four of them witnessed double-digit growth leading to surge in inflation, even as the government is making efforts to bring it down to a target of 6-7% in the country, whose currency has a fixed parity with the dollar.
Both Prime Minister HE Sheikh Hamad bin Jassim bin Jabor al-Thani and Finance Minister HE Yousef Hussein Kamal have said that tackling inflation is a priority.
According to a report prepared for the Dubai International Financial Centre, Qatar, along with the UAE, has failed to qualify in one of the five criteria for the common GCC currency union as its inflation was much above the set standards.
“The rising inflation will require extra efforts in order to stabilise our economies and provide the appropriate environment for monetary union to succeed,” Qatar Central Bank (QCB) Governor Sheikh Abdullah bin Saud al-Thani said yesterday on the sidelines of a meeting in Jeddah, where Gulf Arab central bankers approved a draft agreement for the monetary union.
QCB had repeatedly hiked cash reserve ratio and launched certificates of deposit to suck out the excess liquidity and thus tame inflation.
“Given the growth in macro economy, it is not surprising to have high inflation, which is largely due to food prices,” an economist told Gulf Times.
Going by the present indications, he said, inflation was expected to remain high but slightly moderate to about 14% in this financial year.
Although the rent, fuel and energy group index — having more than 20% weight in the consumption basket — continued to be the largest contributor to the overall inflation, its intensity seems to have moderated.
Its index recorded 24.42% growth in second quarter this year against 26.17% a year-ago period as the Qatari government had placed a moratorium on rent hikes for two years.
Among the food, beverages and tobacco group, bread and cereals became costlier by 28.05%; meat by 24.69%; fish and seafood by 30.38%; milk, milk products and eggs by 20.83%; oil and fats by 29.38%; fruits and vegetables by 21.44%; potato and other tubers by 11.10%; sugar and sugar products by 14.55% and tea, coffee and cocoa by 4.75%.
Rental prices surged by 24.89% year-on-year in second quarter, fuel and energy became costlier by 2.05% and coal and other kinds of fuel by 8.72%.
Miscellaneous goods and services, comprising gold, rose by 13.13% mainly on precious belongings (up 24.40%); goods not elsewhere classified increased by 19.39%; restaurants and coffee shops by 11.23%; personal care materials and other services by 7.56%; child care products and paper products by 4.79%; personal care services by 4.08%; personal luxurious goods not elsewhere classified by 3.17% and residency in hotels by 2.69%.
Clothes became expensive by 16.17%; tailoring of clothes by 14.17%; garments by 8.28% and footwear by 6.19%.
The index of furniture, textiles and home appliances rose by 7.98% even as washing machines, dryers and dish washers became costlier by 20.86%; cooling and heating systems by 23.26%; home cleaning devices by 13.79%; glassware, porcelain, tableware and utensils by 13.05%; furniture and furnishings by 9.91% and other home appliances by 8.74%.
The transport and communications’ group index was up 7.39%. Among it, tyres and spare parts became expensive by 14.27%; other expenditure on transport means by 22.73%; services of purchased transport means by 13.26%; land transport by 22.33%; air transport by 15.38% and personal transport equipment by 5.55%.
The index of entertainment, recreation and culture index rose 7.09% and that of the medical care and medical services by 3.55%.
Among the medical inflation index, medical services outside hospitals became expensive by 8.49%; dentists’ services by 12.175 and other medical services and tests by 7.34%