Qatar Economic Outlook Issue Number 13

Figure 2-13: Qatar CPI, Energy and Non-
Energy Prices 
)%(
 
23
5
-4
-3
-2
-1
0
1
2
3
4
5
6
-60
-40
-20
0
20
40
60
80
100
120
140
2016 2017 2018
Q1 Q2 Q3 Q4 Q1 Q2 Q3
Q4 Q1 Q2 Q3
Q4
(N
ov
)
Annual
2019
2020
2021
Qa
ta
r C
PI
(%
)
W
or
ld 
Ba
nk
p
ric
e 
ind
ic
at
or
s 
(%
)
Energy (100=2010)
Non-energy (100=2010)
Qatar CPI (100=2018) (R-axis)
Source: World Bank commodity prices & prepared by PSA
Figure 2-14: Evolution of the CPI basket 
5.2 
7.4 
-6.0
-4.0
-2.0
0.0
2.0
4.0
6.0
8.0
10.0
2016
2017
2018
2019
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q
4 
(N
ov
)
2020
2021
Po
int
s 
& 
%
Others
IT and transportation
Education & Health
Clothing & Furniture
Housing
Food and Tobacco
CPI (%)
Core CPI (%)
Source: Planning and Statistics Authority (points depict 
the magnitude of the impact in absolute terms)

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Qatar Economic Outlook 2021 - 2023 
62 
the inflation rate in Qatar (as occurred in 
2017 as a consequence of the blockade 
measures taken against the country). Also, 
changes in domestic and international 
demand and the state of monetary and fiscal 
policies would contribute to inflation positively 
and negatively by increasing and decreasing 
the quantity and prices of imports. This is 
highlighted by what took place in 2020 when 
interest rates were cut, and generous 
financial support was provided to many 
economic sectors, but the subsequent impact 
on prices turned out to be negative instead of 
positive as postulated by conventional 
economic theory. 
When examining the housing inflation (rent, 
utilities costs), which also appears in Figure 
(2-14), it needs to be considered not in 
isolation but in its historical context, as the 
increase in the supply of real estate and the 
lack of demand have been pushing the 
housing price inflation downward since 
2016. As well, it can be understood when 
regarding the food group, which remains 
stable while witnessing a positive impact on 
the general inflation rate a fact that is caused 
by the impact of the government’s subsidy 
policy for national agricultural food products, 
in particular dairy products and white meat, 
as well as the policy of operating Qatari ports 
at full capacity combined with finding new 
shipping routes to international markets, 
which in total has led to a lowering of food 
prices and a reduction in the costs of 
transporting imports. 
When looking at the same scenario for 2019, 
it can be seen that it was a mixture of the 
impacts of foreign inflation, and the effects of 
domestic policies, most notably the 
temporary reduction in fuel prices that 
coincided with the imposition of selective 
taxes on tobacco and harmful soft drinks, 
which together led to an increased 
contribution by the food group and a 
decreased contribution by the transport and 
communications sector in shaping the 
inflation rate, which in turn reduced the 
contribution of the groups of entertainment 
and other services. 
As regards the Producer Price Index (PPI) in 
Qatar, it is almost equal to the global energy 
price index, because it consists of the prices 
of three industrial groups that depend on 
global oil and gas prices, namely: Mining 
(72.7%), Manufacturing (26.8%), and Utilities 
(0.5%). They played a pivotal role in shaping 
the index as indicated by Figure (2-15), which 
shows that it went through three phases 
during (2016 – October 2021) that reflected a 
number of factors, foremost of which are: (1) 
the fluctuation of the global production 
supply, (2) the fluctuation of the demand by 
the major industrial countries, which was 
evident during the economic downturn during 
the Covid-19 crisis in the middle of 2020, and 
currently it is going through a third phase 
resulting from the recovery of demand and 
supply, which of course coincides with the 
recovery of the economies of many countries 
after lifting a large part of the precautionary 
restrictions to contain the spread of the 
pandemic. As can be seen from Figure (2-