The paper “ Qatar as a Stable Economy - Cost of Living and Inflation, Unemployment and Fiscal Policies” is a thrilling variant of the case study on macro & microeconomics. This section of the analysis of the macroeconomic situation of Qatar as an economic system is going to discuss the history, the current situation, and the predictable future of economic phenomena namely inflation, exchange rates, interest rates both lending and deposit, consumer spending patterns, and investment patterns. Statistical methods of data presentation will also be used where necessary. Inflation is the rate of change in the wholesale price index (WPI) value on a year-on-year basis (Solman, and Wride, 2009).
This is due to the imbalance between the demand and supply of money or the increase in the cost of production of commodities. Before the year 2004, inflation in Qatar had been kept low. Between 2005 and 2017 the average inflation rate year-on-year was 3.3% with an all-time high of 16.6 % in June 2008 which was mainly the effect of the rise in prices of property, (WEOD, P.12) the depreciation of the US Dollar against major currencies, and the increase in demand for goods and services. -9.9% in December 2009 was the lowest over the twelve-year period owing to the global economic crisis(MDPS, 2012).
It is however expected that due to the sound fiscal and monetary policies like the diversification of the economic practices that can be seen Qatar will be able to keep the rate of inflation at manageable levels of 1 to 3%. an inflation rate of 2 to 3% is suitable for any economy since this keeps the interest rates low (Solman, J.
and Wride, A. 2009). The Qatari riyal has enjoyed good exchange rates with other major world currencies notably since the year 2001 which was the year the currency was pegged to the US dollar at a fixed rate of 1 USD= 3.64 QR. (MDPS, 2012). Since Qatar exports mainly oil and gas which are denominated in US Dollars the peg of the country’ s currency to the US $ is expected to last longer. It is also notable that Qatar has vast foreign in form of Dollars at approximately 11 billion US $ excluding gold.
Ministry of Development Planning and Statistics. Measuring the standard of living in Qatar, Household Expenditure and income survey 2012-2013, 2015.
Qatar National Development Strategy, 2011-2016.
Sloman, J. and Wride, A. (2009) Economics 7th edition FT Prentice Hall
The Saudi Gazette, 2012
World Economic Outlook Database