Monday, Jun 27, 2011
DUBAI (Zawya Dow Jones)--Annual consumer prices in Qatar rose 1.7% in May, from 1.5% last month, a sign that inflation is becoming more of a headache for the fast-growing Arab Gulf state, which is embarking on a huge World Cup spending program.
Transport and communications, comprising 20.5% of the overall consumer price index, or CPI, increased 0.4% on the year in May, while the rent, fuel and energy basket, which accounts for 32.2% of the index, was down 0.5% compared with May 2010, the latest data from the Qatar Statistics Authority showed late Sunday.
Qatar, which is likely to grow at close to 20% this year, according to the International Monetary Fund, is weary of record pre-financial crisis inflation levels returning as its economy booms and it gears up to spend billions of dollars on infrastructure ahead of the soccer World Cup in 2022. The country returned to inflation in December last year after a protracted period of deflation throughout 2009 and most of 2010.
In January finance minister Yousef Kamal said inflation would stay between 0%-1% this year and the central bank would be ready to intervene by issuing more local bonds to domestic lenders to sweep up excess liquidity.
-By Alex Delmar-Morgan, Dow Jones Newswires; +974 6659 9818; alex.delmar-morgan@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
27-06-11 1032GMT
