Inflation

Inflation made the headlines again today in both the Peninsula and the Gulf Times after reaching almost 12% in 2006, compared to 8.8% the previous year. The main cause was, once again, rent increases. Expected wage increases of 20% in the next year are likely to aggravate the inflationary situation, yet despite this high inflation the government has yet to increase deposit rates. This table in Qatar Central Bank's website states that deposit rates are still below 6%. According to yesterday's Gulf Times wage increases are not sufficient: last year wages rose 15% compared to an increase in the cost of living of 24%.

In other news the Qatar Government's investment arm, Delta 2, is considering increasing its stake in Sainsbury as part of a "strategic investment".

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Qatar Doha Middle East
inflation