Money Supply Contraction Will Keep Inflation Subdued

In April, Qatar's M2 money supply fell by 5.7% y-o-y, backing up our view that consumer prices will remain subdued for several months to come. The official methodology for measuring monetary aggregates was recently changed - the current series only goes back to the start of 2007. However, the 'old' data series shows that M2 had not exhibited negative annual growth since the beginning of 2002 (and the slip into negative territory back then had not been so large).

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