KUWAIT – Inflation in the Consumer Price Index (CPI) slowed to 2.8 percent year-on-year (y/y) in May, a further drop from April's 3.3 percent and the lowest figure for more than two years, the National Bank of Kuwait (NBK) said Friday. The softness was largely due to a major slowdown in food price inflation, but price increases in most other segments also remain subdued, the report noted. Core CPI inflation, which excludes food and beverage prices, stood at 2.5 percent y/y. The core measure has remained under 3.0 percent the past 6 months, which points to restrained inflationary pressures for the majority of the components in the index. "Food prices declined for the second month in a row, dropping 1.3 percent m/m. The 3.6 percent y/y increase was the smallest since the end of 2009. The deceleration in food price inflation has helped keep general inflation in check," the report said. Fruit and vegetable prices fell 2.1 percent y/y, while meat, poultry, and fish prices were up 4.1 percent y/y, below previous trends. Overall, food price level is now similar to that of last November's. Meanwhile, clothing and footwear prices were up 4.8 percent y/y, from 4.4 percent in April, due to the readymade garments and footwear sectors. These saw y/y price rises of 5.4 percent and 7.1 percent respectively. Inflation in most other components remained in check. Transport and communication prices rose 2.9 percent y/y in May, only slightly above the recent average of 2.7 percent. Prices of other goods and services also rose 2.9 percent y/y, from 2.3 percent in April. But inflation in this component is volatile and still below the average for last year. – SG/KUNA
