By Santhosh V Perumal
Business Reporter

Kahramaa's new pricing mechanism, effective from September, appears to have had no impact on Qatar's cost of living, based on consumer price index (CPI), which rose 1.7% year-on-year (y-o-y) in October, official figures suggest.

The overall CPI inflation in October was up 0.2% against September’s levels mainly on costlier food and beverages as well as recreation, besides higher rents, said the figures released by the Ministry of Development Planning and Statistics (MDPS).

The y-o-y CPI inflation jump was largely on account of higher expenses for education, tobacco, transport and food.

Housing, water, electricity and gas group – with a weight of 21.89% in the CPI basket -- saw its index rise 1.8% y-o-y in October this year and it was up 0.5% from the previous month's level.

Kahramaa had introduced new slab system for the pricing of electricity and water in order to rationalise the consumption and better its financial health.

According to MDPS dataset, the housing, utilities and gas group had seen a higher 0.9% and 2.1% month-on-month and y-o-y increase respectively in September 2015.

The CPI of October 2015, excluding “housing, water, electricity, gas and other fuels” group showed an increase of 1.8% y-o-y but showed a slight 0.2% increase compared with the previous month.

Expecting consumer price levels to be “muted”, MDPS in it Qatar Economic Outlook for 2015-17 said the country’s CPI inflation is likely to come down to 2% this year from 3.3% in 2014 but will see a modest pick up in the next two years.

Education group, which carries 5.75% weight in the CPI basket, saw the maximum rise of 18% y-o-y in October 2015 and the index was unchanged from the September level.

Tobacco group, which has 0.27% weight in the CPI basket, increased 6.3% y-o-y in October this year but month-on-month, it was unchanged.

Transport sector, which has 14.59% weightage in the CPI basket, saw its group index expand 2.8% y-o-y in October 2015; while it fell 0.7% against the previous month's level.

Food and beverage, which has a weight of 12.58% in the CPI basket, saw its group index rise 2.2% y-o-y in October and it notched up 0.4% against the September levels.

Clothing and footwear group, which carries 5.11% weight in the CPI basket, saw 0.4% y-o-y increase in its index in October 2015 and it rose by a similar proportion compared to September this year.

Furnishings and household equipment group, which carries 7.7% weightage in the CPI basket, witnessed 0.3% y-o-y rise in its index in October this year; while it was unchanged from September levels.

Miscellaneous goods and services, which have 5.69% weightage in the CPI basket, witnessed 0.3% rise y-o-y in October this year but reported a sharper 1% expansion against the September levels.
Communication, which carries 5.87% weight in the CPI basket, saw its group index increase 0.1% y-o-y in October this year; while it was unchanged from the previous month's levels.

However, recreation and culture, which have 12.68% weightage in the CPI basket, saw its index plunge 3% y-o-y in October 2015 but it rose 0.8% compared to September this year.

Restaurants and hotels segment, which has 6.08% weight in the CPI basket, saw its group index fall 0.5% y-o-y in October 2015 but it was unchanged month-on-month.

Health sector, which carries 1.79% weightage in the CPI basket, witnessed 0.3% fall y-o-y in October this year; even as the index was unchanged month-on-month.