Soaring house rents were the single largest driver of higher inflation in the country last year, contributing a massive 73 percent to price rise, the Qatar Central Bank (QCB) said in its annual report for 2007.
The banking regulator said inflation reached 14 percent at the end of last year, while Abu Dhabi-based Arab Monetary Fund (AMF), in a report released recently, put the rate even higher in the first and second quarters of the current year.
The price rise peaked at a high of 16.59 percent in the second quarter (Q2) of this year, breaking all previous records. In the first quarter, though, the rate jumped only marginally from the 2007 level to 14.25 per cent, said the AMF.
Talking of consumer price index (CPI), the Qatari central bank said it stood at 151.56 percent at the end of December, up from 133.23 in 2006. Inflation was, in fact, higher at 14.77 per cent in the first quarter (Q1) of 2007, but for reasons the banking regulator did not explain, it slid to 12.82 percent in the next quarter.
In a sea-saw, it shot up again to reach 13.73 percent in the third quarter (Q3) and a bit higher at 13.74 per cent in the last quarter of 2007.
According to the QCB, house rents mounted inflationary pressure beyond expectations and soared last year due to a severe housing shortage. The shortfall was the result of a near-exploding population, which is growing due to a rapid influx of foreign workers into the country.
Qatar witnessed population growth of 18 percent last year, leading to an acute housing shortage despite the fact that building activity was hectic throughout the year, ensuring some supply of residential units, the banking regulator said.
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