Kuwait inflation climbs to 15-month high

Kuwait inflation climbed to a 15-month high of 4.4 per cent year-on-year in August, mainly driven by a rise in food prices, data showed on Monday.

Inflation in the world's fourth largest oil exporter has been accelerating this year as the oil-reliant economy recovers from last year's sharp contraction.

Consumer price growth stood at 4 per cent on an annual basis in July, still well below a record high of 11.6 per cent in August 2008.

On the month, prices in the Opec member rose 0.4 per cent following a 0.6 per cent increase in the previous month, data from the Central Statistical Office showed.

Central bank governors from Kuwait and Saudi Arabia voiced their concerns last month about rising inflationary pressures stemming from factors they cannot directly influence such as food costs.

Kuwait, unlike its fellow Gulf oil producers, abandoned the dollar peg in favour of a currency basket in 2007 to rein in a sharp spike in inflation.

Food prices, which account for 18 per cent of the Kuwaiti basket, soared by 1.2 per cent month-on-month in August, following a 3.1 per cent jump in the previous month.

Housing prices, which have the largest weight of 27 per cent, were unchanged in August, following a 0.1 per cent dip in July. Transport costs, the third biggest component, were flat.

A Reuters poll forecast inflation in Kuwait at 4.2 per cent for the full year of 2010, up from 4 per cent last year. The central bank said last month it expected inflation to edge up to 4.5 per cent towards the end of 2010. 

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