Font Size

- Aa +

Mon 9 Jun 2008 11:27 AM

Font Size

- Aa +

Kuwait mulls subsidies on 100 products

Gov't looking at subsidies to offset impact of inflation in Gulf state.

The Kuwaiti government is considering subsidises on 100 products to offset the impact of record inflation in the only Gulf state that does not peg its currency to the dollar, a newspaper reported on Monday.

The Ministry of Labour and Social Affairs has prepared a list of the 100 products for cabinet which, if approved, would bring the number of subsidised goods to 123, Al-Watan daily reported, citing a list of the products it obtained.

Rice, milk, cheese, juices, fish, baby food, shampoo and soap were among the items listed, the paper quoted Matar Al-Mutairi, head of the cooperative society in the Sulaibikhat area of Kuwait, as saying.

Kuwait is battling annual inflation at a record 10.14 percent in February, spurred by housing and food costs surged.

The Gulf state severed its link to the dollar in May 2007, saying the US currency's weakness was fuelling inflation by making some imports more expensive. Kuwait pays for about a third of its imports in euros.

Kuwait has since allowed its dinar to rise more than 9 percent. The dollar has fallen almost 20 percent against the euro since the beginning of 2007.

Cabinet plans to present to parliament on Tuesday an action plan to tackle inflation, which is surging across the Gulf Arab region as oil prices soar.

Inflation will average at least 9 percent in most Gulf Arab states this year, a poll by newswire Reuters showed last month.