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Tue 19 Aug 2008 11:38 AM

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Kuwait okays further measures in inflation battle

More subsidies, consumer protection committee, approved by cabinet.

Kuwait's government has approved a set of proposals from a committee tasked with developing a strategy to fight inflation, including a recommendation of more subsidies, two newspapers said on Tuesday.

As well as a wider range of subsidies, the proposals include supporting some food firms in sectors such as livestock and flour mills to reduce prices for consumers.

The plan also includes the creation of a consumer protection committee to prevent fraud and the export of subsidised products.

The cabinet approved the recommendations at its weekly meeting on Monday, daily Al-Seyassah cited Minister of Commerce and Industry Ahmad Baqer as saying.

"These recommendations became binding rules now after being approved by the cabinet, and starting today we will circulate them to the concerned parties for immediate implementation," he said.

The cabinet also approved an additional budget to implement the committee's 19 recommendations, newspaper Al-Anbaa said in an unsourced report.

Both the ministry of finance and the ministry of commerce and industry will prepare a draft law of the budget to be presented to parliament for approval, the paper said.

The world's seventh-largest oil exporter, the only Gulf Arab state without a dollar peg, is fighting record inflation hitting 11 percent in April and May, driven by food and housing costs.

Earlier this month, the government allowed cooperative supermarkets, where nationals can buy subsidised food, to import commodities directly, cutting out wholesale importers in an effort to reduce prices at the till, according to a decree published in the official gazette.

In June, Baqer also told parliament that Kuwait could work with fellow Gulf Arab states to invest in food production and farming abroad in an effort to secure food supplies amid high global commodities prices and fears of shortages.

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