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Wed 26 Jan 2011 08:09 PM

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Qatar finance minister sees inflation up to 1% in 2011

Central bank would issue bonds to soak up liquidity if there was a need to control inflation

Qatar finance minister sees inflation up to 1% in 2011
Deflation in Qatar had been easing in late 2010 (Getty Images)

Inflation in Qatar, which until recently had seen falling prices, will be between 0 and 1 percent in 2011, its finance minister said on Wednesday.

Finance Minister Youssef Kamal also said Qatar’s central bank would issue bonds to soak up liquidity in the market if there was a need to control inflation.

“It depends on the timing, the requirements, and the liquidity in the market,” Kamal told reporters. “When we think that there is [excessive] liquidity in the local market then there will be intervention from the central bank because we don’t want the inflation that we experienced in 2006 and 2007.”

Deflation in Qatar, the world’s top liquefied natural gas exporter, had been easing in late 2010 as the OPEC member’s economy recovers from a slowdown in 2009.

The country returned to inflation in December, with living costs up 0.4 percent.

Analysts polled by Reuters are expecting average inflation of 3 percent in Qatar for 2011.