The drivers of inflation in Qatar; an analysis of turbulent periods

This research paper focuses on finding the drivers of inflation rates in Qatar while focusing in particular on turbulent socio-economic and political periods (particularly, Qatar’s Blockade and COVID-19). In order to examine Qatar’s inflation changes, I compared it with three countries from the GCC who have a similar economies and standards of living as Qatar. The countries are Saudi Arabia (KSA), United Arab Emirates (UAE), and Kuwait.
Taken together, the existing literature has two main arguments. First, they suggest that M1 money supply and food prices is what drives inflation. Second, another group of academics have suggested that the GCC inflation rates follow the world’s economy trends.
The data I retrieved for the purpose of this research include seven main variables: Annual inflation rates, monthly inflation rate, monthly food inflation, monthly M1 money supply, monthly Fuel prices (Diesel), monthly real estate rents, and monthly average wages. With the inflation rate being the dependent variable, and the M1 money supply, fuel prices (Diesel), real estate rents, and average wages being the independent variables. The analysis is based on the trends observed in the data, during the period from 2015 to 2022, in order to view the data pre and post both uncertain economic periods.
The analysis of the data have shown that, despite their similarities, inflation in the GCC and Qatar do not follow a common trend. The data shows that there is a general increase in M1 money supply, food inflation, diesel prices during COVID-19 for all studies countries, followed by a general increase in inflation rates. However, this study concludes that such drivers are considered weak to impact core inflation, and their impact does not always apply.