Inflation in Kuwait fell below 3 percent for the first time in nearly three years. The consumer price index (CPI) inflation dropped to 2.8 percent year-over-year (+0.2 percent month-over-month) in June, the slowest pace since November 2020 and down from 3.2 percent in the previous month.
Price rises in the food & beverages sub-component eased to a still-elevated 5.6 percent, down from 6.1 percent in May, halting a five-month rising trend, according to NBK-Economic Research.
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Meanwhile, the housing services item, the largest by weight in the CPI basket and composed mainly of rents, saw a notable slowdown to 0.9 percent year-over-year compared to 1.4 percent in May.
Moderating core inflation amid mixed sectoral performance
Core inflation in Kuwait, which excludes food and housing, edged down to 3.1 percent from 3.2 percent in May. The household furnishings, healthcare, education, and restaurants & hotels subcomponents saw higher year-over-year increases, but these were offset by slower rises in transportation, communication, and recreation subindices, while clothing & footwear and services & miscellaneous goods were unchanged on an annual basis.
So far this year, headline inflation has averaged 3 percent year-over-year, lower than the average 3.6 percent rate seen in 2023. Analysts expect inflation to maintain the softening trend, averaging 3 percent in 2024, amid subdued consumer demand.
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