Despite a marginal uptick in the consumer price index (CPI) in November, Kuwait’s inflation remained largely subdued during 2014 and is expected to end the year at an average of 3 per cent, a report said.

The main source of upward price pressures has been international food inflation, added the latest Economic Update released by the National Bank of Kuwait (NBK).

Food inflation climbed in November, on the back of a recovery in international food prices. However, this is projected to subside in the near-term in-line with lower global food prices. A strengthening dinar is also set to keep any significant upward inflationary pressures at bay.

Inflation came in at 3.1 per cent year-on-year (y/y) versus October’s 3.0 per cent y/y. Core inflation continued to ease in November, coming in at 3 per cent y/y after October’s 3.1 per cent y/y, as inflation in most of its components slowed down or remained unchanged, according to the report.

Inflation in the food price index rose from 2.6 per cent y/y in October to 3.3 per cent y/y in November, in-line with a rebound in global food prices. Upward inflationary pressures on local food inflation are expected to subside in the near-term, however, on the back of a slowdown in international food prices.

This in turn should help diminish pressures on the overall inflation rate, NBK noted.

Inflation in housing services was unchanged at 4.4 per cent y/y in October.  With changes in the inflation rate of this component reported once every quarter, the next report is due in December. A significant change in inflation in this segment is unlikely in the final quarter of 2014 and NBK forecasts it to remain near current levels.

Inflation in the clothing & footwear and furnishings & household maintenance components held on to their downward trend in November. Clothing & footwear inflation eased from 1.6 per cent y/y in October to 1.1 per cent y/y in November. Inflation in the furnishings & household maintenance component slowed down from 5 per cent y/y in October to 4.4 per cent y/y in November.

Inflation in the ‘other goods and services’ segment continued to show signs of resurgence in November. Inflation in this segment, which includes prices of personal care products and jewellery and certain business charges, accelerated to 1.0 per cent y/y in November, from 0.2 per cent y/y in October. – TradeArabia News Service