Food prices help slow inflation in June to 5%

Kuwait's annual inflation slowed to a ten-month low of 5 per cent in June helped by a fall in food prices, data showed Wednesday, but generous government spending is expected to keep levels above those of neighbours this year. Inflation in the world's fourth-largest oil exporter has been hovering above 5 per cent since the beginning of this year, well below double-digit levels seen in 2008. It stood at 5.4 per cent year-on-year in May, after climbing to a nearly two-year peak of 6 per cent in December. On a monthly basis, consumer prices in the Opec member — where civilian protests in recent months were more limited than those in Bahrain and Syria — grew 0.2 per cent in June, according to data from the Central Statistics office. Article continues below That was below a 0.3 per cent rise in May. Inflation in the Gulf is expected to creep higher this year on robust global commodity prices, a weak dollar and increased government spending following popular unrest in various countries across the Arab world. But slow lending growth and ongoing weakness in the property sector in parts of the region are seen keeping consumer price growth well below the record peaks seen in most Gulf states in 2008, despite oil prices above $90 (Dh330) per barrel. In Kuwait, food costs — which account for 18 per cent of the consumer basket — fell for the first time in four months, by 0.6 per cent month-on-month, the data showed.