problem by slashing U.S. interest rates twice in the past eight days to three percent . Gulf States with currencies linked to the U.S. dollar were under pressure to follow suit . Qatar reduced its deposit rate to 3.5 percent , but left its lending rate at 5.5 percent . Liz Martins , Head of MENA , Business Monitor International says Qatar is facing a serious problem . `` You 've huge a amount of monetary easing and if you think that that 's not even going to feed through properly for six to nine months then , you 've got a really dangerous inflationary outlook , '' she says . `` The only policy option really that they have is to revalue the exchange rate . '' Kuwait did just that in May , ditching the dollar-peg for a basket of currencies , and speculation is growing that other GCC -LRB- Gulf Cooperation Council -RRB- countries will do the same . Tristan Cooper , Vice President and Senior Analyst at Moody 's Middle East , says the argument for revaluation is becoming more convincing . `` The economic justification for revaluation is growing stronger as inflation multiplies and the
-LRB- CNN -RRB- -- Amid all the talk about storm clouds gathering over the U.S. economy , it 's easy to forget there are other places in the world where the sun is still shining . A shortage of housing is contributing to an inflation rate of almost 14 percent in Qatar Take Qatar , for example ; a small emirate in the Gulf whose economy is booming . When the final figures come in , Qatar 's economy is expected to have grown 17.8 percent in 2007 . Qatar National Bank predicts growth to slow in 2008 , but at 16.5 percent who could complain ? Well , consumers for one . While growth has steamed ahead , so has inflation . At the end of 2007 , Qatar 's official inflation rate was nearing 14 percent -- the highest in the region . Three major factors are contributing to Qatar 's soaring inflation rate : High levels of government spending ; growing demand for housing , which is pushing up house prices and rent , and the riyal 's peg with the dollar , which is pushing down interest rates . The U.S. Federal Reserve exacerbated the latter