KUWAIT CITY – Inflation in the Consumer Price Index (CPI) was 2.8% year-on-year in June, similar to its May rate, and still the lowest figure for more than two years, reported Arab Times Thursday. This was the second consecutive month where food price inflation was much lower than previous averages, coupled with subdued inflation in most other segment. Inflation averaged 3.4% for 1H 2012. Core CPI inflation was 2.1% y/y. It has remained under control for the first half of 2012 and should continue to be for the remainder of the year. The core measure excludes food and beverage prices, and therefore is less affected by variation in international commodity prices. Food prices went up 0.6% month-on-month (m/m) and 4.9% y/y. Food inflation for June is still considered to be relatively on the low side, as the average for 1H2012 was 6.9% (and 9.7% for full year 2011). Fruit and vegetable prices fell for the third month in a row, as they went down -2.8% m/m and -0.4% y/y. Meat, poultry, and fish prices were up 6.1% y/y, as the fish component remains the most volatile. Food prices may see some upward pressure in the near term as Ramadan effects show up in the data, and also perhaps in the long term as the effects of unfavorable weather conditions in the US and Europe reaches the consumer level. – Agencies
