[Economics] Experts expect Qatar and the Gulf states to succeed in facing inflation

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Doha - Local economists in Qatar expect that Doha, and the Gulf states in general, will succeed in curbing inflation, which has reached unprecedented rates in the entire world, as a result of the Russian-Ukrainian war, high energy prices and the impact of supply chains.

 

 

Experts pointed out that the Gulf countries have an important advantage in facing inflation, which is the financial surpluses resulting from oil and gas revenues.

Their expectations are consistent with the statements of the Director of the International Monetary Fund, Kristalina Georgieva, that the GCC countries will continue their success in containing inflation, which may exceed 10% in the Middle East this year, but it is also expected to gradually decline with the stability of commodity prices.

Financial expert Rami Zaytoun says that the inflation rate in the Gulf countries is still the lowest in the world (Al-Jazeera)
Energy price escalation

Associate Professor of Finance at the College of Business and Economics at Qatar University, Rami Zaytoun, told Al-Jazeera Net that inflation rates have reached high levels over the past year in all countries of the world, but they are still much lower in the Arab Gulf countries compared to European countries and the United States of America.

Zaytoun attributes the high levels of inflation in the Gulf countries to several things. Including the escalation of energy prices, which is the main driver of high food costs, in addition to the impact of food sources that are obtained from Ukraine, pointing out that the inflation rate in the Gulf countries ranges from less than 2% to nearly 6%, with an average of 4%, which is a lower rate. Many European countries, Britain and the United States.

Inflation in the State of Qatar is considered high compared to other Gulf countries, according to Zeitoun. However, it began to decline, as it was 6% last September, while it declined to 5.9%, and it is expected to continue its decline during the coming period.

The finance professor explains that it is important to look at inflation from another angle, which is the rise in food prices. We find in Qatar one of the lowest rates in the Arab Gulf at a rate of 1.6%, while this rate in other countries in the Gulf reaches 4.6%.

He continued, "Despite the high inflation in food prices in the Gulf countries, it is considered very low compared to the countries of the European Union, Britain and the United States, as it reaches 17 percent in Britain and 10.5 percent in the United States, for the first time in 40 years."

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inflationary factors
Regarding the success factors of the Gulf countries in confronting inflation, Zeitoun points to the high prices of energy resources of oil and gas, which led to the achievement of large cash surpluses that were exploited by these countries to curb inflation, as well as other factors such as setting ceilings for the increase in oil prices, which contributed to Reducing the impact of inflation on the population of these countries.

This is in addition to other factors that include increasing spending by the Gulf states, as well as increasing government support through social programmes, which contributed to reducing the impact of inflation on the population. In addition to the diversity of food import sources that allowed these countries to obtain them at lower prices instead of importing them from countries affected by the rise in international prices.

On expectations of inflation levels during the current year, Zeitoun said that according to the International Monetary Fund reports, inflation will decrease, but the decline will not be significant at the global level.

However, as for the Gulf countries, it is expected to decrease clearly, especially in the State of Qatar, as it does not exceed 3.3% during the coming months. As for other Gulf countries, rates will also decrease in varying proportions, while inflation rates are expected to remain high in Britain and Europe due to their connection to Russian energy sources.

The continuation of the war in Ukraine does not bode well for the recovery of the global economy (Getty Images)
Government support for salaries
For his part, economist Abdulaziz Al-Hammadi believes that inflation in the State of Qatar, despite its clear rise, is not dangerous for the population compared to many countries in the world, as a result of the rise in energy prices. Qatar is among the largest countries in the world in terms of production and export.

Al-Hammadi pointed out, in an interview with Al-Jazeera Net, that the continuation of the Ukrainian-Russian war does not herald a decline in inflation in many countries of the world, which puts its people under the burden of the huge rise in the prices of all products and food, with the exception of the Gulf countries, which are considered the least affected, especially as a result of government support for salaries, which is reflected Of course, on the standard of living and the ability to face the high prices.

Al-Hammadi explained that the rise in energy prices was clearly reflected in the general budget of the State of Qatar, which witnessed a financial surplus estimated at nearly 30 billion riyals, which shows the extent to which this country has benefited from the rise in energy prices.

However, some, according to the economist, fear a prolongation of the Russian-Ukrainian war and its reflection on the continued escalation of inflation rates and rising prices around the world, because it will certainly affect the individual's standard of living, as food products and production requirements are imported at high prices, and thus the population will bear the bill for this rise.

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Inflation is the enemy of development
In the same context, economist and academic Abdul Rahim Al-Hour expects Al-Jazeera Net that the current year will witness a decline in the inflation rate in the State of Qatar and in the six Gulf countries, according to indicators of international economic institutions.

Al-Hawar attributed the reason for this to Qatar's strengthening of its ability to confront the phenomenon of rising global prices in all products by exploiting its natural resources represented in energy sources, especially the gas sector, in which it occupies the global lead in production and export.

He pointed out that the Gulf region is affected by hypersensitivity to inflation of all kinds, whether at the level of imports by virtue of the link to the dollar, or real estate by virtue of the increase in the money supply and the high costs of production and income, or the natural one linked to the natural time value of money.

 

https://www.aljazeera.net/ebusiness/2023/2/17/رغم-استمرار-الحرب-الأوكرانية-وتأثّر