Qatar’s CPI inflation stood at 3.3% y/y in March, the same as the preceding month, on shrinking food and beverages prices and slower transport and housing price growth, data from the planning ministry showed on April 14. The CPI inflation will likely remain in the low single digits in H1, helping soften the impact of the government’s aggressive public spending that is sustaining inflationary pressures in the gas-rich country.

The core CPI, excluding housing, water, electricity, gas and other fuels group, however, edged up to 2.6% y/y in March from 2.5% y/y a month earlier on a zero m/m growth.

In monthly terms, the CPI inflation also flattened m/m, reversing a 0.6% m/m hike in February.

Food, tobacco and beverage prices (with a 13.2% weight in the index) fell 0.7% m/m in March on favourable seasonal factors that cut fresh produce and processed food costs. The annual component recoded 1.9% y/y deflation, deepening from a 1.3% annual contraction in February.

Housing prices (21.9% of the basket) grew a marginal 0.1% m/m in March reducing the annual increase to 5.4% from 5.7% y/y in February, on falling utilities costs. Rent charges however remain high amid strong expatriate demand for residential units.

Transport prices (15% of CPI) fell 0.6% m/m in March cutting the annual expansion to 1.5% from 2.1% y/y in February as the government liberalized fuel prices to cut spending.