By Santosh V Perumal/Business Reporter
Education, dining and hospitality have been for the first time explicitly captured in Qatar’s revised cost of living index, which rose 3.4% in January this year, according to official estimates.
Higher rents and transport costs - as well as costlier education, tobacco, furnishing, clothing and restaurant charges - led the country’s consumer price index (CPI) inflation rise compared to the new base year 2013, the Ministry of Development Planning and Statistics (MDPS) said.
In the new CPI, the Classification of Individual Consumption According to Purpose (CIOCOP) has been used, which divides the prices basket to 12 main groups (against 8 with 2007 as base year). More than 1,100 commodities and services have been covered in all the groups.
The weights of recreation and culture, restaurant and hotels, miscellaneous goods and services, and communication have been increased; while other groups - especially housing, water, electricity and gas saw lesser weightage.
Housing, water, electricity and gas – which have 21.89% weight in the revised index (against the previous weight of 32.2%) - soared 8.2% in January this year.
The MDPS had said cost of living in Qatar is set to nudge up to 3.7% in 2016 on rising rents, especially in the affordable housing for the low- to middle-income segment.
“The expanding population will continue to exert pressure on local non-traded services, particularly residential rents,” the ministry said in its Qatar Economic Outlook 2014-16 Update.
The CPI of January 2015, excluding “housing, water, electricity, gas and other fuels” group shows an increase of 2% compared to the base year 2013.
According to QNB projection, the country’s inflation is expected to moderately rise as higher infrastructure spending will result in a large inflow of workers, putting pressure on housing and prices.
Given the speculative demand, especially in the middle-income housing market, the revision of the weightage of housing in the overall (CPI) basket apparently seems to digress from the reality, an economist said.
Transport, which has a weight of 14.59% in the CPI basket (15%), witnessed its index surge 5.3% in January 2015.
Recreation and culture - which is the third heaviest in the CPI basket with a weight of 12.68% (4.1%) - however witnessed its group index decline 3.8%. The group includes expenditure incurred abroad in respect of transport, travel and tourism.
Food and beverages, which has a weight of 12.58% (13%), saw its index rise 0.2% in January 2015 CPI. The index of tobacco, which has a weight of 0.27% (0.3%), soared 14%.
Furnishings, household equipment - which has a weight of 7.7% (8.2%) - saw its group index soar 4.8%.
The index of restaurants and hotels, which has a weight of 6.08% (3.7%), expanded 1.3%.
The communication sector, which has a weight of 5.87% (5.5%), saw its group index fall 0.8% in January 2015.
The index of education, which carries the weight of 5.75% (6.7%), rose 11.4% in January this year.
Miscellaneous goods and services, which carry 5.69% weight in the CPI basket (3.5%), saw its group become costlier by 1% in January 2015.
Clothing and footwear, which carry 5.11% in the CPI basket (5.8%), saw their price spurt 1.9% in January 2015.
Health group, which has 1.79% weight (2%), reported a 1.9% increase in January this year.
