Kuwait inflation slows to 25-month low of 2.8%
Source: BI-ME with Reuters , Author: Posted by BI-ME staff
Posted: Thu June 28, 2012 11:42 am

KUWAIT. Kuwait's annual inflation rate eased to 2.8% in May and prices edged down slightly from the previous month, mainly because of cheaper food, state news agency KUNA reported.

KUWAIT. Kuwait's annual inflation rate eased to a 25-month low of 2.8% in May and prices edged down slightly from the previous month, mainly because of cheaper food, state news agency KUNA reported on Wednesday.

Inflation in the major oil exporter has been slowing gradually. It hit 3.3% in April, down from a peak of 5.4% in May 2011.

Consumer prices fell 0.1% month-on-month in May, compared to a 0.6% drop in April, KUNA said, citing data from the Central Statistics Office.

"The low inflation reading is testament to a weak demand climate and anaemic credit growth," Liz Martins, senior regional economist at HSBC in Dubai, told Reuters.

"Even with the salary hikes we have seen in recent months, we don't expect a major pick-up in the short- to medium term."

Around 3,000 Kuwaiti customs workers went on a week-long strike for higher pay in March, disrupting port traffic, while employees at national carrier Kuwait Airways grounded planes for three days during a walkout. The civil service commission eventually agreed to wage rises of 25%-30% for public sector employees, and proposed increases of up to 330 dinars (US$1,190) per month for Kuwaiti private sector workers.

Paul Gamble, head of research at Jadwa Investment in Riyadh, told Reuters there was very little inflationary pressure coming from abroad, while consumer and government spending were not increasing that much.

"In general, the political uncertainty has hindered project implementation, which has kept a lid on one aspect of inflation," he said.

Project spending in Kuwait has been slowed by political instability, which has seen eight governments come and go in just six years. On Tuesday, thousands of Kuwaitis protested against a court ruling that effectively dissolved a parliament dominated by opposition Islamists.

"June will be potentially sluggish but then we have Ramadan coming up, so we will obviously see the usual Ramadan impact on food prices," Gamble said.

Food prices normally rise during the Muslim holy month of Ramadan, which begins in late July, as families enjoy elaborate evening meals after a daylight fast.

In May, food costs, which account for almost a fifth of Kuwait consumer expenses, fell 1.3% month-on-month, after a 2.6% plunge in April. Transport prices edged up 0.1 percent from the previous month, KUNA said.

Analysts polled by Reuters in March predicted average inflation in Kuwait of 4.5% in 2012, down from a three-year high of 4.8% last year.

 

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

date:Posted: April 17, 2014
KUWAIT. According to a newly released report by Kuwait Finance House Research, the global sukuk market saw a modest volume of US$31.14 billion in new sukuk issuances in 1Q2014. This volume represents a drop of 9.82% compared to US$34.53 billion worth of issuances in 1Q13.
date:Posted: April 16, 2014
INTERNATIONAL. The WGC pointed out that the Chinese bank savings amount to US$7.5 trillion but only about US$300 billionn is allocated to gold, signifying the potential for gold demand to grow as Chinese wealth climbs.
date:Posted: April 16, 2014
UAE. "A similar drop to 2013 is unlikely. Those who wanted to get out of gold did, and the rest of 2014 will probably be a year of sideways trading."
SAUDI ARABIA. The GCC said in a statement that foreign ministers of the six-member body had met in Riyadh for a comprehensive review of measures used to implement foreign and security policies.
dhgate