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Kuwait City: Annual inflation in Kuwait jumped to 6.2 per cent in September, the highest on record, as soaring oil prices fuelled economic growth, and analysts said the rate would have been even higher had the Gulf state not allowed its currency to revalue.
Housing costs, the most heavily-weighted item in the All Items Consumer Price Index, surged 12.6 per cent, while food costs rose 3.7 per cent, and transport and communications 5.6 per cent, according to data from the government's Central Statistics Administration received yesterday. The inflation rate is the highest on record, according to central bank statistics dating to December 1994. Inflation in August was 4.8 per cent.
"Rapid economic growth has exposed domestic constraints in the economy," said Simon Williams, Middle East economist at HSBC Holdings. "Fiscal policy is expansionary and domestic demand is strong."
Kuwait, the fourth-largest oil producer in the Middle East, is the only Gulf state to have dropped its peg to the US dollar.
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