The Gulf Cooperation Council (GCC) economies are, fortunately, not suffering from serious inflationary threats nowadays. Causes of this welcoming development include checked prices of imported foodstuffs, government subsidies, and the near absence of a rise in property rates.
The average inflation rate hovered around 4 per cent in 2011, up from 3 per cent in 2010. However, this is a far cry from inflationary pressures that prevailed in 2007 when GCC member state Qatar sustained a punishing 14 per cent inflation rate.
At any rate, inflation rates in the GCC partly reflect imported inflation. This is a reference to prices of imported goods. The rule of thumb goes that sharp rises in oil prices provide justification for petroleum-importing countries to raise prices of their exports, thereby contributing to the phenomenon of imported inflation.
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