Qatar Economic Outlook Issue Number 13

Figure 1-5: Rate of change of energy and non-energy prices and their components (%) 
50.8
30.0
Non-Energy
20.8
Aricultur1900
24.9
Food
4.9
Raw materials
170.4
138.9
Energy
-100.0
-50.0
0.0
50.0
100.0
150.0
200.0
-20
-10
0
10
20
30
40
50
60
199
0
199
5
200
0
200
5
201
0
201
5
201
6
2
01
7
201
8
201
9
J
an
Fe
b
M
ar
Apr
M
ay
J
u
n
J
ul
Aug
Se
p
O
ct
N
o
v
D
ec
J
an
Fe
b
M
ar
Apr
M
ay
J
un
J
ul
Aug
Se
p
O
ct
2020
2021
Ene
rg
y
Non
-E
ne
rg
y
Source: World Bank Commodities Price Data, downloaded in Nov. 2021

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Qatar Economic Outlook 2021 - 2023 
30 
Inflation of Key Regions and 
Countries
Given the globalization of trade and 
production and the liberalization of markets, 
it is not sufficient to analyze the drivers of 
inflation at the domestic level, including the 
nature of the effects of the economic policies 
pursued. It is also necessary to consider the 
inflation rates of external partners in foreign 
trade and investment, as for example shown 
in Figure (1-6) for the key trade partners of 
Qatar during 2019 and 2020 with the 
preliminary estimates for 2021. This shows 
that there is a great variation in inflation rates 
between regions and countries, which 
indicates that each economy has its own 
inflationary sources that are subject to the 
nature of its domestic economic structure and 
foreign trade relations. 
This discrepancy in inflation rates perhaps 
underlies the multiplicity of opinions among 
macroeconomic policy experts, observers, 
and practitioners concerning whether the 
current phenomenon of price growth is 
temporary, i.e., it will dissipate after dealing 
with supply chain disruptions and 
unemployment, or whether it is a trajectory 
that will continue into the medium and long 
term, because it is linked to the expansionary 
economic policies that have been used and 
are still used by many countries of the world, 
the most important of which are: (1) low 
interest rates, (2) the extensive use of 
quantitative easing by developed and 
emerging countries, including the United 
States of America, the U.K., and Australia, 
both of which - in theory – can lead to a high 
rate of inflation. 
In general, it has become accepted by a 
number of economic thinkers, led by former 
US Treasury Secretary Lawrence Summers 
and Nobel Prize winner in economics 
Professor Paul Krugman, that the current 
phenomenon of inflation is not only caused 
by the lack of supply of goods and services to 
meet the large increase in aggregate 
demand, but are also caused by the 
repercussions of expansionary economic 
policies.
Thus, the difference in ideas at present is not 
whether the expansionary economic policy is 
behind inflation, rather instead, the difference 
exists in views on when to start tightening 
economic policy in order to contribute to 
lowering the rate of inflation - such as 
canceling quantitative easing and, raising 
interest rates, in addition to those other noted 
economists, such as the former governor of 
the Bank of England, Mervyn King, and Dr. 
Mohamed A. El-Erian, President of Queens 
College, Cambridge University, both 
advocate a return to traditional monetary 
policy to manage inflation. 
It is worth noting that the institutional opinion 
of central bank officials of advanced 
economies until early November 2021, in