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Significant increase in Kuwait’s annual inflation rate

Official data showed that inflation rates in Kuwait rose by 2.78% on an annual basis, due to COVID-19

Kuwait’s official data showed that inflation rates rose by 2.78% on an annual basis, due to the Coronavirus pandemic repercussions.

The Kuwaiti Central Statistical Bureau said in a statement that inflation rate rose last November by 118.2 points compared to 115 points in the same period last year.

The statement said nine groups’ prices have risen, most notably food and beverages by 9.83%. This has affected the annual performance index.

The prices of education and restaurant groups decreased by 15.12% and 0.08%, respectively. But, the housing services group stabilized, according to the statement.

The rate of inflation in Kuwait grew by 0.25% over the past.

On a monthly basis, the prices of the remaining groups were stable.

In March of 2020, Kuwait’s consumer price inflation increased to 1.9% year-on-year. This is compared to 1.7% in February, and 1.5% at the end of the last quarter of 2019.

The forecast for the whole of 2020 indicated a decline in inflation in the country due to the weak economic conditions in general.

Inflation’s causes

Last June, the National Bank of Kuwait said in a report the high inflation rates are due to several factors, including the high prices of foods, home furnishings and maintenance equipment, and decline in housing rents deflation.

Rents’ decline rate may appear to have decreased to low levels after many years of weakness due to oversupply. However, the sector may witness a new wave of decline, due to the weak growth and lower housing demand, with the possibility of a decline in the number of expatriates.

At the same time, the basic components of inflation, especially consumer goods such as clothing and household goods, may face pressures that push them back.

It is worth noting that the local authorities in Kuwait intensified their efforts to prevent price manipulation, especially during the outbreak of the pandemic.

Travel restrictions and concerns about food shortages have led to spikes in purchases of basic consumer goods.

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