Charts & Numbers

Kuwaits year-on-year inflation will remain in double digits despite governments plans and Central Bank intervention. The Central Bank of Kuwait (CBK) clamped down on credit and money growth in a bid to drain excess cashflow resulting from high oil revenues. In January CBK Governor Sheikh Salem Abdulaziz AlSabah warned that high inflation constituted a “national challenge” for the oil-rich emirate.

“Inflation should ease as a result of slower economic growth, lower commodity prices, months of tighter money” [and the dinars appreciation against the dollar]

- National Bank of Kuwait

For the past 4 weeks local banks were suffering from a liquidity crisis pushing rates higher for short term deposits. The currency has appreciated 9% since the government dropped the dinars peg to the US currency in May of 2007. Inflation rose to double digits in February (for the first time) to reach a staggering 10.14%, then dropped slightly in March to 10.1%, lastly hitting 11.1% in May.

“NBK expects to see year-on-year CPI [Consumer Price Index] rates in the seven to eight per cent range from now to year-end and that would put 2008 inflation at 10 per cent for the year, compared to 5.5 per cent in 2007″

- National Bank of Kuwait

A report released by National Bank of Kuwait (NBK) said it expects a slight drop in inflation figures for the rest of the year on the back of falling world food and commodity prices. The report expected a sharp rise in prices in September during the holy month of Ramadan.