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Sat 16 Feb 2008 11:35 AM

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Kuwait sees record 7.3% inflation spike

Annual inflation in October driven up by housing and food costs, gov't data shows.

Housing and food costs were behind a record 7.3% spike in Kuwait's annual inflation in October, official data received on Friday showed.

Housing and food, the most heavily-weighted entries in the All Items Consumer Price Index, soared 12.6% and 6.08% respectively.

The index clocked up to 121.2 points at the end of October, compared with 113 points a year earlier, government data received on Thursday showed without giving a breakdown.

The index rise was the third in four months as high oil prices fuelled economic growth in the world's seventh-largest oil exporter. Inflation in September was 6.2%.

Transport costs, the third most heavily-weighted entry in the index, rose 7.6%, and those of household goods and services climbed 5.3%.

October inflation rates are the highest on record, according to central bank statistics dating back to December 1994.

Kuwait is the only Gulf Arab state to have dropped its peg to the US dollar, blaming inflation on the declining US currency through imports.

Kuwait relies heavily on imported goods and is susceptible to imported inflation as well as growth-fuelled domestic demand. (Reuters)

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