Kuwait’s inflation rate looks set to average around 3.0% in 2021

Kuwait’s inflation rate looks set to average around 3.0% in 2021

KUWAIT: Kuwait’s consumer price inflation edged down slightly to 3.2 percent y/y in July versus June but has trended higher over the past year. Price increases in the food, clothing, transport and recreation segments continue to drive the headline rate. Strong consumer demand and pandemic-linked supply chain disruptions have caused inflation to surge globally.

Recently released data from the Central Statistical Bureau (CSB) show that consumer price inflation moderated slightly in July to 3.2 percent y/y from 3.4 percent in June (+0.3 percent m/m). Still, inflation has trended higher so far this year and prices have now risen (m/m) in fourteen of the last fifteen months, driven by a combination of recovering demand, supply-side disruptions and higher international food prices.

Disruptions to global supply chains is a worldwide phenomenon, as pandemic-linked economic reconfiguration and worker shortages struggle against the surge in post-lockdown consumer spending. Similar factors (as well as higher energy prices) have also pushed up inflation in a range of developed countries to much higher levels of late, including the eurozone (4.9 percent, November) and the US (6.2 percent, October).

Food prices

Price pressures in Kuwait have been most pronounced in the food and beverages category, which in July climbed 10.1 percent y/y.