Qatar’s annual inflation saw flat growth in November 2010 as a rise in transportation and communication costs and food prices were diluted by the continued decline in housing costs, local media reported, citing data from the Qatar Statistics Authority (QSA).
The consumer price index (CPI) breakdown, however, is yet to be published on the QSA website.
The flat annual growth in November 2010 follows a deflation of -0.8 per cent in October 2010 led by the continued decline in housing and energy costs.
The rate of annual decline in the housing component slowed in November 2010 to record -7 per cent compared to the -9 per cent seen in October and the average -14 per cent since the beginning of 2010.
Meanwhile, the decline in housing costs was diluted by a 3.9 per cent annual increase in transportation and communication costs in November 2010, and a 3.7 per cent increase in food prices in November 2010 .
On a monthly basis, inflation accelerated to its highest level in almost 17 months, rising 0.4 per cent in November 2010 from 0.13 per cent in October 2010. This was, again, led by a 1.44 per cent monthly increase in transportation and communications costs (from a -1% monthly decline in October).
Food prices saw a marginal monthly change in November of 0.15 per cent from 1.1 per cent in October, while the monthly change in housing costs remained almost stable in November 2010 for the third consecutive month.
"Continued downward pressure on rental costs throughout 2010 kept the overall level of prices in Qatar in the negative zone, again," commented Beltone, the investment bank.
From deflation of -4.9 per cent in 2009, annual deflation currently stands at -2.7 per cent over the January to November 2010 period. The monthly change in the housing and utilities component of the CPI, which is led predominantly by rental costs and in total represents 32 per cent of the total CPI, has been steady over the months of September and November 2010 after an average monthly decline of -0.8 per cent over the first half of 2010, and -1.8 per cent in the second half of 2009.
Meanwhile, "food prices have been rising at a faster pace in [the second half of 2010], prompted by the surge in seasonal consumption levels, which coincided with the holy month of Ramadan, followed by Bairam, along with the recent global pick-up in the prices of some food commodities, such as wheat, sugar and rice," explained Beltone in its daily report Thursday.
"We expect that 2010 will mark the end of Qatar’s deflationary cycle, with deflation reaching -2.4 per cent in 2010," the report added, based on rising food prices, a weaker forecast US dollar, along with a steady and gradual improvement in rental costs. Qatar should see inflation moving to positive territory, averaging around 1.5% in 2011, before gaining more ground in 2012, as an expected rise in imported inflation starts to have a more visible impact on other non-food items.