October 04, 2007	Thursday	Ramazan 21, 1428

DOHA, Oct 3: Qatar is enjoying dramatic economic growth on the back of surging gas revenues, but the Gulf state is battling an increasingly high rate of inflation led by high housing costs, officials and analysts say.

Inflation hit 12.8 per cent in the second quarter of 2007 after reaching 14.78 per cent in the first quarter, according to statistics provided by Qatar’s Planning Council.

“(Housing) rent is the main reason behind inflation,” Finance Minister Yussef Kamal said recently, claiming that rent swallows up between 60 and 90 per cent of personal income.

“Rents have increased by 168 per cent in the past two years,” he added.

The International Monetary Fund measured inflation in Qatar -- which sits atop the world’s third largest gas reserves -- at 11.8 per cent in 2006 and projected a drop to 10 per cent this year.

Kamal, who also holds the economy and trade porfolios, said an economic boom “beyond the capacity” of the tiny peninsula is contributing to rampant inflation.

The Opec member’s gross domestic product grew by 6.3 per cent in real terms in 2005 and 8.8 per cent in 2006, according to the IMF, as world oil prices rocketed to new record levels and Qatar pumped out more natural gas.

Qatar’s oil and gas sectors represent over 60 per cent of the economy, according to various sources, while the IMF put nominal GDP in 2006 at $52.7 billion.

“The increase in public expenditure in light of budget surpluses, as well as an increase in population and a surge in demand” have also contributed to higher inflation, said Khaled Khater, chief of monetary policy at Qatar’s central bank.—AFP