As the housing markets cools down, Qatar’s inflation will ease considerably this year to between 3% and 5%, QNB Capital said in its first Qatar Economic Review.
The increase in housing costs has been a key driver of inflation in Qatar in the last few years. Inflation averaged 11.3% between 2004 and 2008 compared with 1.6% in the preceding five years (1999 – 2003), QNB Capital said.
However, during the first quarter of 2009, Qatar witnessed a deflation of 8.4% due to the effects of the global financial crisis and its impact on the housing sector in particular; QNB Capital said citing Qatar Statistics Authority figures.
The overall annual inflation rate reached an all time of 15.1% in 2008 compared with an increase of 13.8% in 2007. Consumer Price Index (CPI) data released by Qatar Statistics Authority for 2008 show all the main groups of commodities and services on the index witnessing an increase. Housing as well as food and beverages were the main inflation drivers last year.
Housing expenditure increased 19.6% last year, though lower than the 29.3% recorded in 2007 and 26% in 2006.
The Family Expenditure Survey (FES) done by Qatar Statistics Authority in 2006 / 2007 showed the average household spending per month on housing was QR6,538 a month, which formed 29.9% of the total monthly expenditure. Housing forms the largest part of household expenditures with a weight of 29.9% compared with 19.1% in 2000 / 2001.
The average monthly household expenditure on transportation was QR3,046 and for food and beverage QR2,689.
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