QNB Capital Study Shows 3.3% Inflation Increase in GCC

Doha , January 30 (QNA) - Inflation in the GCC was 3.3% in 2011 compared to 2.8% in 2010, according to QNB Capital financial analysis released Monday. The figure is still lower than the global inflation figure which was 4.5%, the figure is also significantly lower than the rate of inflation in the Middle-East which was, on average, 13.8% according to QNB Capital. According to the analysis, GCC's fuel subsidies were the main reason for maintaining an inflation figure lower than the global average. Especially that Brent crude prices increased by 39% in 2011, which is even higher than its increase rate during the world credit crunch in 2008, when it increased by 34%. On the other hand, the increase in the prices of food was the main reason for the inflation increase compared to 2010. According to the report, the GCC suffered due to the shortage of food supply in the global market. As a result, the United Nations recorded an increase of 23% in the price food and agricultural products. Rent prices decreased, on average, in three of the countries in the GCC, but increased in the remaining ones, according to the report. Prices of communication saw a medium-range increase in the majority of the GCC. The State of Qatar saw a decrease of 4.2% in the costs of dwelling. However the biggest decrease was in Bahrain where the costs decreased by 12%. UAE was another country that saw its costs of dwelling decrease. The other three countries saw them increase, particularly in the Kingdom of Saudi Arabia where it increased by 7.7%. The study attributed the increase to the shortage in houses. As for the food inflation, the Study stated that Bahrain had the lowest rate at 2%, in contrast to Kuwait which saw an increase of 9.7% Meanwhile the State of Qatar had the highest rate of inflation, up by 6.4%, in the transport and communication sector, according to QNB Capital's study. The study projects a continuation of the medium-level inflation in the GCC during 2012. An increase in the cost of dwelling is expected, balanced by a decrease in the prices of food. QNB Capital's study relied on data consumer price indices in 2011 for five GCC countries. In addition to the price indices of the Sultanate of Oman up to the month of November 2011. The inflation rate in the region was calculated based on the relative weight of inflation in each country. (QNA)