Country Report Kuwait May 2011

Economic performance: Food inflation declines for the second month

Inflation rose to 5.3% year on year in February, compared with 5.2% in January largely because of base effects. In month-on-month terms, prices declined by 0.1% as a result of a continued fall in food prices, which dropped by 0.5%. Prices of beverages and tobacco and clothing also continued to register declines on a month-on-month basis. Housing services and the price of household goods and services remained steady in month-on-month terms. The only increases were registered in the cost of education and medical services, which rose by 0.3% month on month, and other goods and services, which climbed 0.1% month on month. Although lower food prices have meant steadying headline inflation in recent months, price pressures owing to large public-sector wage rises and increases in government transfers remain a risk in the coming months.

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