By Lin Noueihed
Gulf Arab state to fork out $3.7bn for scheme to offset effect of soaring inflation on citizens.
Kuwait will spend over 1 billion dinars ($3.7 billion) on a cost-of-living allowance scheme for its citizens working in the public and private sectors to offset spiralling inflation, the state news agency Kuna said.
Kuwait, the only Gulf Arab oil producer whose currency is not pegged to the dollar, said last month it would give Kuwaitis an additional monthly allowance of 120 dinars amid growing discontent over rising prices.
Around 430,000 nationals, including pensioners, will receive the allowances, which will amount to wage increases of between 15% and 133% depending on the position, Kuna reported late on Saturday, citing an unidentified source in Kuwait's civil service administration.
Kuwait, the world's seventh-largest oil exporter, is struggling to curb annual inflation that soared to a record of 7.3% in October, driven by a jump in housing prices and food costs.
The Gulf state severed its link to the dollar last May, saying the weak US currency was fuelling inflation by making some imports more expensive. It has allowed the dinar to rise more than 6% to a 20-year peak since then.
The allowances would be granted in addition to any regular raises in basic wages or social benefits of public sector employees, the source said, according to Kuna.
Wage increases in the seven years to January 31 had cost the government more than 600 million dinars a year, the source said.
Other Gulf oil producers are also trying to cushion the impact of inflation on their populations.
Saudi Arabia, home to about 25 million people, has introduced measures including public sector cost of living allowances, welfare payments, subsidies and tighter bank lending restrictions to tackle inflation at a quarter-century peak of 7% in January. (Reuters)