Qatar’s international reserves rose $43.5 billion in August driven by a strong current account surplus, an increase of $7.2 billion as compared to the same period last year, according to a report.

The latest QNB Monthly Monitor report showed that the import cover stood at 8.2 months at the end of August, well about the IMF-recommended level of three months for pegged exchange rates, said the Gulf Times report.

The reserves will further rise this year and the next on continued high current account surpluses, it said.

Qatari oil prices fell in August owing to weaker global demand, said the QNB report.

The stagnant eurozone economy, the large second-quarter contraction in Japan and the slowdown in emerging markets are contributing to the weakness in hydrocarbon demand and putting downward pressure on international oil prices, it said.

"Qatar's crude oil production has been on a general decline, but redevelopment plans should stabilise output," the report was quoted as saying. said.

Qatar's foreign merchandise trade balance registered a surplus of QR31.5 billion ($8.3 billion) in August, the QNB report said.

The surplus, however, decreased 3.9 per cent year-on-year, primarily on a strong rise in imports related to the growing population and large investment spending.

The total exports rose 0.3 per cent year-on-year in August last year on a recovery of oil production, which total exports in August this year stood at QR40.8 billion and imports at QR9.3 billion.

Meanwhile, Qatar's Consumer Price Index (CPI) for August  rose 3.8 per cent year-on-year, said the report.

Housing and rents, the largest component of overall inflation with a 32.2 per cent share, rose 7.9 per cent year-on-year in August leading to an acceleration of domestic inflation.

Counterbalancing these domestic inflationary pressures, foreign inflation has been on a downward trend this year as international food prices have been falling on record global food harvests and large stockpiles.

Domestic food prices rose 1.2% year-on-year in August, owing to seasonal effects, raising foreign inflation to 2.7 per cent, an eight-month high.

The domestic inflation will mainly be driven by rising rents in response to the growing population. Lower international food prices are likely to keep foreign inflation low, thus partly offsetting the rise in domestic inflation, said the report.

There was, however, a risk that large investment spending and the growing population could lead to supply bottlenecks owing to limited domestic capacity, it added.