Kuwait inflation to stay ‘modest’ in 2013
Kuwait, January 30, 2013
Some upside pressures, such as consumer spending and higher international food and commodity prices, may transpire at a later date in 2013, but Kuwait’s inflation will remain modest through the year averaging 3.5 per cent, a report said.
As consumer price data for 2012 comes to a close, lower than expected food price inflation and low pressures elsewhere have resulted in tamer inflation rates for the second half of the year, and the inflation is expected to average 2.9 per cent for 2012, said the latest Kuwait economic Brief, released by the National Bank of Kuwait (NBK).
Inflation in the Consumer Price Index (CPI) ticked up to 2.3 per cent year-on-year (y/y) in November, from 2.1 per cent in October.
The slightly higher rate in November came from some month-on-month increases in clothing, household goods and services, and transportation, according to the brief.
Although the inflation rate has edged higher in the past 2 months, it remains modest, averaging 3.0 per cent 11 months into the year. Core inflation, which excludes food and beverage prices, stood at 1.8 per cent y/y in November.
The brief pointed out that food prices were up 4.0 per cent y/y in November, up from 3.8 per cent in October. The general picture remains similar to the previous month, as most sub-components saw modest increases relative to the sharper rates we saw in 2010 and 2011.
Prices for clothing and footwear climbed 3.7 per cent y/y in November, compared to 3.1 per cent in October. Prices for readymade garments (i.e. store-bought clothing), a sub-component of this segment, went up 5.6 per cent y/y, causing much of the upward inflationary pressure here.
Data for transport and communication prices showed a 2.6 per cent y/y increase. Prices also went up 1.1 per cent m/m, acting as one of the drivers in the slight uptick in the headline inflation rate in November.
Price inflation in this segment came primarily from a 5.5 per cent increase in personal transport equipment (cars). Prices for “saloon” (sedan) cars went up 5.4 per cent y/y, while price for other vehicles was up 9.3 per cent y/y.
Similar to recent trends, the inflation rate in a handful of the segments remained below the 2 per cent mark. Household goods and services went up 1.9 per cent, up from 1.1 per cent in October and thus also responsible for some of the m/m increase in headline inflation.
Similarly, education and medical care also recorded a 1.9 per cent y/y increase, close to its 1.7 per cent in October. In general, these subdued pressures in most segments highlight a continued source of downward pressure on inflation in Kuwait, the brief said. – TradeArabia News Service