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Kuwait: Kuwait experienced a notable economic shift in December 2023, with the annual Consumer Price Index (CPI) registering a significant 3.37% increase compared to the previous year as reported by the nation’s Central Statistics Bureau.

The report unveils that the yearly increase was mainly driven by a substantial 4.74% increase in the prices of the food and beverage group. Moreover, the cost of clothing and footwear saw a noteworthy surge of 6.72%, highlighting the broad-ranging impact on various sectors within the economy.

Additionally, the report identifies higher prices for essential commodities such as cereals, bread, meat, poultry, fish, seafood, dairy products, oils and fats, and sugar products. On the other hand, the prices of fresh, frozen, and dried fruits and vegetables moved in the opposite direction, experiencing a decrease during this period.

The Consumer Price Index holds significance for Kuwait’s economic landscape. Acting as a crucial economic indicator, it reflects the country’s business condition and financial situation and serves as a tool for monitoring overall price movements in retail markets.

“This indicator is used as a measure of the changes in the purchasing power of the currency and to determine the interest rates and liquidity by the Central Bank of Kuwait and to support the adoption of appropriate economic decisions by the official bodies as well as for the preparation of national accounts at constant prices.”, the report stated.

Furthermore, in response to the economic dynamics, the Central Bank of Kuwait took measured steps to manage inflation. The report notes that in July of the previous year, the central bank increased the discount rate by approximately 25 basis points to 4.25%. This move was aligned with the US Federal Reserve’s decision to raise interest rates by a quarter of a percentage point, showcasing a coordinated effort on the global economic stage.

The central bank emphasized its commitment to remaining supportive of economic growth, particularly in non-oil sectors. This strategic adjustment in interest rates signifies a proactive approach to economic challenges, indicating a delicate balance between managing inflationary pressures and fostering sustainable economic development.