Qatar July Consumer Prices Drop

Qatari consumer prices fell in July for the seventh consecutive month this year on lower housing and fuel costs in the world’s largest exporter of  LNG. Consumer prices declined 2.9 % in July, compared with a 2.8% fall in June, the Qatar Statistics Authority said on its website today. Rent, fuel and energy prices declined 15.3% in July, compared with the same month last year, the data showed.

“They have one of the fastest growing economies but they also have one of the fastest deflating economies,” said John Sfakianakis, chief economist at Banque Saudi Fransi in Riyadh. “I don’t think it creates any structural impediments to the economy.” Qatar cut its overnight deposit rate by half a percentage point to 1.5% on 11 August 2010, a move prompted by domestic deflation and low global borrowing costs, the central bank said. The rate was last reduced in May 2008 when Qatar trimmed it by a quarter point to 2%. Qatar, which had an inflation rate as high as 15% in 2008, predicts prices will rise 1% this year.- Bloomberg