Qatar Economic Outlook Issue Number 13

Qatar Economic Outlook 2021 - 2023 
60 
commercial banks worldwide, the Interbank 
interest rates and other interest rates were 
directly as well as indirectly affected by the 
monetary policy tools discussed above, in 
addition to being affected by the levels of 
interest rates in various banks around the 
world that also have a commercial 
relationship with the State of Qatar. It is noted 
from Figure (2-12) that the daily yield rates of 
the US treasury and the interbank transaction 
interest rates of Qatari banks for weekly, 
monthly, and annual periods have fallen to 
their lowest levels during Q3 of 2020, but they 
gradually began to recover until the end of Q2 
of 2021, before again declining in Q3 and 
then increase in Q4 (November) of 2021. 
 
Figure 2-12: Weighted interbank transaction 
interest rates (%) 
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2016
2017
2018
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
(N
ov
)
Years
2019
2020
2021
Pe
rc
en
ta
ge
%
US Treasury Bill
1 Week
1 Month
1 Year
Source: QCB and prepared by PSA

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Part 2 - Economic Performance 2017 - 2020 
 
 
61 
Impacts on CPI and PPI
The household Consumer Price Index (CPI) 
is affected by several dynamic factors related 
to the supply and demand levels for goods 
and services, and whether they are produced 
locally or imported. Moreover, it is also 
affected by the nature of economic policies, 
whether expansionary or contractionary, Box 
(2-1).
Given the fact that the State of Qatar imports 
more than 90% of its needs from international 
markets, then one of the biggest factors 
affecting its price indices is international 
energy and non-energy prices, as shown in 
Figure (2-13), which reveals the strength of 
the correlation between the Qatari CPI, and 
global energy and non-energy price indices 
according to the World Bank database.
Like the economies of most countries of the 
world, consumer price inflation rates in Qatar 
witnessed significant increases during the 
past twelve months, rising from negative 
2.95% in November of 2020 to positive 6.1% 
November of 2021, which indicates that price 
recovery is higher than in 2020 by more than 
300%.
From the above, it is clear that there is an 
almost total correlation between domestic 
price indicators and international prices for 
energy and non-energy sectors, especially 
during the period 2020-2021, which were 
affected by the economic repercussions of 
imposing Covid-19 containment measures 
and then gradually lifting them in all 
countries.
To identify the most important factors that led 
to the price recovery during this same period, 
the main groups of the components of the 
consumer price basket were clustered as 
shown in Figure (2-14). It is clear that 
activities related to transportation and 
tourism that were affected by the 
repercussions of Covid-19 during 2020, 
including hospitality, accommodation, arts 
and entertainment, were also behind the 
price hike during the last three quarters of 
2021, in particular after the gradual lifting of 
restrictions imposed on those activities, 
especially transportation, restaurants, and 
parks. 
However, it should not be underestimated 
that local economic and social policies and 
regional and international geopolitical 
variables play an important role in shaping