KUWAIT CITY, July 25: The recent data from the Central Administration of Statistics shows that Kuwait’s annual consumer price index (CPI) inflation grew by 2.84% in June. This figure highlights a persistent inflationary trend since the CPI base year was recalculated in 2017 to 2013, rather than the previous 2007 base year.

Over the 78 months studied, inflation in Kuwait has risen by 18.4%, notably higher than in other Gulf countries, except where VAT impacts are considered, such as in Saudi Arabia and the UAE. The inflation increase is primarily driven by substantial rises in specific categories -- food and beverages: 39.2 percent; clothing and apparel: 31.5 percent; entertainment and culture: 25.3 percent; communications: 23.4 percent and transportation: 21.1 percent. Conversely, the “housing services” category saw a modest increase of 4.5 percent, which is considered low since it does not account for residential transactions or rents.

This discrepancy suggests that the actual inflation affecting consumers might be higher than reported. Critics argue that the inflation data does not fully reflect real-world economic conditions due to outdated measurement methods and inadequate data collection practices. The Household Income and Expenditure Survey, which is conducted every decade, fails to capture current trends in purchasing power and consumer behavior, making the inflation statistics less meaningful.

The report points to several factors contributing to high inflation in Kuwait, including -- administrative failures in service and trade policies, monopolistic practices by commercial agencies, high import costs due to limited local industry, poor quality of public services such as health and education, and lack of effective monetary policies to manage market liquidity.

To address these issues, the report suggests several solutions, including -- improving measurement and analysis tools, updating the Household Income and Expenditure Survey more frequently, implementing effective monetary policies to manage inflation and enhancing the quality of public services, and reducing import costs. Ignoring these inflationary pressures could lead to further economic and social challenges, including decreased consumer purchasing power and increased pressure on the national currency.