By Martina Fuchs
On the month, consumer prices in the OPEC member picked up 0.6 percent.
Kuwait inflation rose to a 13-month high of 4.0 percent year-on-year in July, driven by rises in food and global commodities prices.
Inflation in the world's fourth largest oil exporter is expected to decelerate again towards the end of the year as economies in the Gulf Arab region start to recover from the global financial downturn.
On the month, consumer prices in the OPEC member picked up 0.6 percent following a 0.5 percent rise the previous month, state news agency KUNA reported, citing figures from the Central Statistical Office.
Food prices, which account for 18 percent of the basket, jumped by 3.1 percent in July, following a 0.1 percent rise in the previous month.
"What drives food inflation is what happens to global commodities prices," said Daniel Kaye, senior economist at the National Bank of Kuwait.
"The central bank will see this as something a little bit beyond its control," he said.
Housing prices, which have the largest weight of 27 percent in the overall basket, dropped 0.1 percent month on month after rising by 1.3 percent in June.
Transport price growth, the third biggest component, remained flat at 0.4 percent month-on-month.
Central Bank Governor Sheikh Salem Abdul-Aziz al-Sabah said on Tuesday that inflation pressures in the Gulf Arab oil producing region had decreased significantly.
"If commodities prices stay more or less where they are now I suspect that food price inflation is probably close to its top. Hopefully towards the end of the year this will start to ease back again," Kaye said.
"Inflation will be a little bit lower from where it is now, edging down towards the 3 percent mark as the impact of this food inflation begins to decline a little bit," he added.
In fellow OPEC member Qatar, the world's largest liquefied natural gas exporter, consumer prices fell 0.5 percent month-on-month in July, mainly due to a drop in housing costs, putting the country's annual deflation at 2.9 percent.
A Reuters poll forecast inflation in the world's fourth largest oil exporter at 4.0 percent for the full year of 2010, the same as last year. (Reuters)