Marginal rise in annual inflation

The CPI-based annual inflation has edged-up marginally (0.06 percent) in September 2019 mainly as a result of increase in prices seen in the six groups, which include tobacco products (127.19 percent), and other miscellaneous goods and services.

However, when compared on annual basis, the monthly CPI index (108.42 point) has declined by 0.75 percent compared to the August CPI. This fall in monthly inflation was attributed to the decline in the prices of goods and services in three main groups which include transport, housing rentals, utilities and others, latest official data show.

Commenting about the numbers and its impact on the local economy, a Doha-based economic analyst, said: “Usually monthly inflation figures are more volatile, and may not tell much about the real market situation as prices of some goods and services may go up and some may come down for several factors other than market forces, which may be a temporary phenomena. It is always better to rely on the annual figures which reflect the real market conditions. Businesses and decision makers also rely on annual trends before making important decisions.”

The economic expert, on condition of anonimity, added: “This downward pressure in inflation can also be attributed to some policy decisions such as up to 40 percent waiver in rents in industrial enclaves and partly due to self-sufficiency achieved in many goods, especially in the dairy and agriculture products which have pushed the prices of many goods down compared to their import prices.”

A month-o-month analysis of CPI for September 2019 compared with CPI, August 2019, showed that there were three main groups, where respective indices in this month have decreased, namely: “Transport” by 4.46 percent, “Housing, Water, Electricity and other Fuel” by 0.20 percent, and Food and Beverages” by 0.07 percent . An increase was also recorded in two main groups, which include “Clothing and Footwear” by 1.56 percent, and “Miscellaneous Goods and Services” by 0.16 percent. “Tobacco”, “Furniture and Household Equipment”, “Health”, “Communication”, “Recreation and Culture”, Education”, and “Restaurants and Hotels” groups had remained flat at the last month’s price level.

The year-on-year increase in CPI (0.06 percent) in September was due to increase in prices in the six groups, namely: “Tobacco” by 127.19 percent, “Miscellaneous Goods and Services” by 4.38 percent, “Restaurants and Hotels” by 1.43 percent, “Communication” by 1.26 percent, “Food and Beverages” by 0.99 percent, “Education” by 0.93 percent. A decline has been shown in price levels also in six groups namely: “Clothing and Footwear” by 3.07 percent, “Housing, Water, Electricity and other Fuel” by 2.07 percent, “Recreation and Culture” by 1.83 percent “Transport” by 0.19 percent, “Health” by 0.08 percent, and “Furniture and Household Equipment” by 0.04 percent.

The CPI of September , 2019 excluding “Housing, Water, Electricity and other Fuel” group stands at 109.49 points showing a decrease of 0.90 percent when compared to the index of August 2019, and a 0.66 percent increase, when compared to the CPI of September, 2018.

Source from: The Peninsula