Kuwait's average inflation climbed to a three-year high of 4.8 percent in 2011, in line with analysts' forecasts, data showed, but price pressures are expected to subside this year. Consumer price growth in the Opec member, which was spared the unrest sweeping the Middle East and North Africa last year apart from some small-scale demonstrations, reached 4.0 percent in 2010.
Kuwait's 2011 inflation rate is the second-highest in the Gulf Arab oil-exporting region, just below 4.9 percent for Saudi Arabia. However, inflation in Kuwait, home to around 2.7 million people, decelerated last year, slowing to a 19-month low of 3.1 percent in December from a 6.0 percent peak seen in December 2010, with analysts expecting it to fall further.
Bank lending to the private sector grew by a mere 2.6 percent year-on-year in December, while money supply growth slowed to a four-month low of 8.5 percent. On the month, consumer prices in Kuwait, which pegs its dinar to a dollar-dominated currency basket, edged higher by 0.5 percent, the fastest rise in three months, the data from the country's Central Statistics Office showed. Food prices, which account for 18 percent of consumer expenses, soared by 1.1 percent month-on-month, rebounding sharply from a 0.1 percent rise in November.
Housing costs, which make up for over a quarter of the basket, increased by 0.8 percent month-on-month in December after remaining flat in the previous two months. Kuwait, one of the richest countries in the world with 2011 per capita income of over $40,700 estimated by the IMF, plans to hold a parliamentary election in February following the latest government resignation in November.
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