(MENAFN- Kuwait News Agency (KUNA)) Local inflation rates are most probably to remain under control for the current year, especially in view of the positive effect of last year's high prices, and the level is forecast below 3 percent, said the latest National Bank of Kuwait (NBK) report.
The report issued Monday said that "Inflation in the Consumer Price Index (CPI) firmed slightly to 3.1 percent y/y in July from 2.8 percent in June, thanks almost exclusively to a sharp increase in food prices.
"Even at this rate, however, it remains much lower than a year ago. Moreover, core inflation (i.e. excluding food and beverages), was unchanged at a modest 2.1 percent," said NBK.
"While it is tempting to link rising food prices to the recent bout of drought-linked hikes in global agricultural prices, it may be too soon for global price hikes to have filtered through the domestic supply chain.
"More likely, the rises were driven by seasonal effects related to the holy month of Ramadan. If so, the prospects going forward are mixed: while Ramadan-linked food price hikes may reverse, the bulk of the globally-driven price increases may still be ahead of us."
Beyond the food sector, the report said, "inflationary pressures remain fairly subdued. The housing services subcomponent (mostly residential rents) failed to register an increase for the 7th month in a row." "Inflation in all other sectors decelerated, except in the 'other goods and services' segment, where it edged up to 2.5 percent y/y from 2.2 percent in June." "Even here, however, inflation remains close to a 4-year low''.
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