Qatar's consumer price index (CPI) inflation is expected to average to 3% this year, which is below 9.9% projected in the Arab world and 3.3% in the Gulf Co-operation Council (GCC) region, according to Kamco Invest.

The country's inflation is slated to further decline to 2.7% in 2024 compared to 7.7% and 2.3% in the Arab and the GCC regions respectively, said Kamco Invest in its report.

In 2023, inflation in Bahrain is expected to be 2.2%, Kuwait 3.3%, Oman 1.9%, Saudi Arabia 2.8% and the UAE 3.4%. By 2024, inflation in Bahrain is estimated to be 2.2%, Kuwait 2.6%, Oman 2.4%, Saudi Arabia 2.3% and the UAE 2%.

Kamco Invest said Qatar’s inflation rate increased by 4% year-on-year in March-2023, recording its lowest mark since February-2022. Qatar’s inflation rate growth was driven by an overall prices increase across the eight categories or sub-indices of its CPI.

"The overall trend in Qatar’s inflation is projected downwards," the report said.

In its latest consultation report, the International Monetary Fund forecasts for Qatar an inflation rate of 3% in 2023 and 2.7% in 2024. On the other hand, the fund also predicts that Qatar’s real GDP (gross domestic product) growth would slow down from 4.2% in 2022 to 2.4% in 2023 and further to 1.8% in 2024.

Inflation remained relatively low in the GCC in 2022 despite averaging higher than estimates in 3.3% compared to annual estimate of 3.1%, according to the IMF's Regional Economic Outlook. Moreover, the IMF expects GCC inflation to fall in the next two years, pencilling an average of 2.9% in 2023 and 2.3% in 2024.

Lower inflation in GCC countries is mainly attributed to governmental intervention such as price caps on certain products, subsidies on key products or utilities and the strengthening of the US dollar on which all GCC countries have pegged their currencies except for Kuwait, which has linked its currency to a basket of currencies including the dollar.

In terms of sectoral inflation trends, the food and beverages subcategory has been one of the most important categories in terms of weight or growth in GCC inflation performance.

Among the GCC countries, inflation growth in the housing subcategory was mixed albeit leaning to positive year-on-year growth in March-2023. Qatar’ housing costs rose by 8.7% on an annualised basis in March-2023, the highest growth among the GCC countries.

Finding that in terms of the communication subcategory, the picture was still mixed; it said both Bahrain and Qatar recorded decline in costs in their communications inflation at -2.5% and -4.8% year-on-year in March-2023, respectively.



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