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Satyendra Pathak
Doha
Qatar's inflation inched up 0.2 percent year-on-year in July on the back of soaring transportation costs in the country, the Ministry of Development Planning and Statistics (MDPS) said in a report on Monday.
According to the consumer price index (CPI) released for the month of July, inflation increased to 108.91 points in July from 108.7 points in the same month a year earlier.
The report ascribed the year-on-year inflation rise to the net effect of increases in seven main groups topped by the transportation sector which jumped 7.8 percent, followed by the health and clothes segments with 4.3 percent and 3.2 percent respectively.
On the other hand, the remaining four main groups witnessed a price drop headed by the telecommunication, food and beverages, and housing and electricity segments, which declined 11.9 percent, 3.4 percent, and 2.9 percent respectively.
When compared on a month-on-month basis, the country's inflation increased 0.1 percent in July, compared to 108.84 points a month earlier.
Over the course of the previous month, five main groups jumped, topped by entertainment sector that gained 3.3 percent, followed by the transportation and health sectors which increased 1.2 percent and 1.1 percent respectively.
On the other side, the telecommunication headed the decliner index falling 11.8 percent, followed by services and restaurants, which went down 0.9 percent and 0.2 percent, respectively, the report said.
According to FocusEconomics, Qatar's inflation is expected to average 1.5 percent in 2018 and 2.6 percent in 2019. The economic research agency also indicated that inflation would remain below 2.5 percent for the next three years.
The country's inflation decelerated to 0.1 percent in June from 0.5 percent in May on lower prices for housing, water, electricity and other fuel.
In a recent report, BMI Research said that Qatar's inflation will average 2.6 percent in 2018, significantly above a consensus of just 1.5 percent.
Gains in oil price in the first half of 2018 help explain BMI's above-consensus view as these gains will affect transport and input costs, and fuel inflation given that oil prices also remain a key determinant of confidence and growth in the Qatari economy.
The report also highlights that the inflationary effects of the housing market correction seen over 2017 appear to be waning, further easing downside pressure on prices.
According to FocusEconomics, Qatar's economy should be supported by higher oil and gas prices in 2018, as well as by the government's infrastructure investment push in the run-up to the 2022 World Cup.
FocusEconomics panelists forecast Qatar's economic growth of 2.6 percent in 2018 and 2.8 percent in 2019.
