By Santhosh V. Perumal
Qatar’s inflation was largely stable in October, registering a marginal 0.1% fall month-on-month mainly on continued easing of rents and cheaper foods.
The consumer price index (CPI), with a revised base year of 2006, stood at 122.3, which is down 4.8% since the beginning of this year, according to the Qatar Statistical Authority (QSA).
The CPI index is a measure of the general price level of goods and services consumed by the average household in Qatar.
The QSA found that Qatar’s inflation, based on CPI, had been falling since July, mainly on rents and clothing. The deceleration in inflation comes amidst strong domestic economy, which is expected to be fastest growing in the world.
HH the Emir Sheikh Hamad bin Khalifa al-Thani recently said Qatar’s economy would grow by 9% this fiscal and by 16% in 2010.
Food, Beverages and Tobacco group, which have 13.2% weight in the CPI basket, saw its index plunged 2.3%, mainly on fall in the prices of fresh vegetables and fruits, fish, seafood, margarine and other oils and fats, other dairy and bakery products, potato products, other cereal products and chocolates.
Although food prices increased in July and August, it was down 3.5% since the beginning of this year. In September, food prices had decreased 0.6% as it was largely a Ramadan period during which the government had announced price freeze on more than 100 basic food items.
Among foods, whose prices have increased in October, include fresh potato, mutton, chicken, beef, unsubsidised rice, preserved and frozen vegetables, condensed milk and milk powder, cheese, coffee and eggs.
Housing, utilities and related services, which carry 32.2% weight in the CPI basket, had fallen 3.3% in October and it was down 13.8% since January 2009.
Rental types include villas, houses, self-contained flats and apartments, QSA said, adding that apartment rents have fallen 20.4% since the beginning of this year.
“A wide ranging survey of prices occur monthly collecting more than 800 rental prices. However, these are limited to either newly let properties of those current available for occupancy, therefore do not fully reflect all currently occupied dwellings which will have, in many cases, pre-existing leases that do not display the price changes seen at the open market,” it added.
“High levels of supply coming to the market and dampened demand on the back of the global financial crisis would keep pressure down on rental rates,” according to Doha Bank CEO R Seetharaman.
With the increase in supply of housing, property rental prices have fallen sharply in 2009, resulting in negative inflation, Monica Malik a senior economist at EFG Hermes in Dubai, was yesterday quoted as saying.
Clothing and footwear prices continued to rise 0.7% in October with clothing increasing by 2.1%, even as footwear became cheaper by 1.8%, after recording price rise in August and September.
Transport and Communication group, which is the second heaviest in the CPI basket with a weight of 20.5%, was up 0.7% in October. It had recorded declines in the previous two months.
Air travel became expensive by 7% in October after witnessing decreases in July, August and September. However, the prices were still 1.4% lower than that in January 2009.
Entertainment, recreation and culture group, which have a 10.9% weight in the CPI basket, became costlier by 5.2% in October. It had registered dip in the previous two months.
Furniture, textiles and homes appliances, which carry a weight of 8.2% in the CPI basket, rose 4.2% in October. In the previous month, its prices were stable.
Medical care and health services, which carry a weight of 2%, became expensive for the second month by 1.8% in October.
Miscellaneous goods and services, which have 7.2% in the CPI basket, rose by 1.1% in October. In the previous month, it was stable.