Sharp drop in food prices is main driver in rate decrease, according to latest data
Kuwait’s inflation eased to 2.3 percent year on year in January, down from 2.6 percent in 2012.
A review by the National Bank of Kuwait has cited a severe drop in food prices, as well as ‘clothing and footwear’ and ‘other goods and services’, as being vital to the slowdown, with the consumer price index (CPI) easing slightly from the 2.9 percent average for the previous year.
Core inflation, which excludes food and beverage, was 2.6 percent year on year in January.
Food prices were up one percent year on year in January – a big drop from 2.1 percent year on year in December. The slowdown pushed the overall year on year inflation rate down by 0.2 percentage points, with fruit and vegetable prices and meat, poultry and fish playing a major role.
Housing costs rose 2.4 percent year on year, and the transportation and communication segment stood at 2.9 percent year on year, up from 2.6 percent in December.
The report said that while inflation has started 2013 at a relatively subdued level, the bank expects “some modest upward pressure on prices as the year progresses, with inflation averaging 3.5 percent for the full year,” adding “the sources of inflationary pressures could be both international – such as higher food or import prices – and local – such as somewhat higher rents”.