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Kuwait inflation at 22-month high

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12:25 30.12.2010
text: Kazinform
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Qatar's November consumer prices were unchanged on a yearly basis after months of deflation as food costs rose but rents edged lower, data showed on Wednesday, while food prices pushed inflation in Kuwait to a 22-month peak. Kazinform refers to Arab News.

Deflation in Qatar, the world's top liquefied natural gas exporter, has been easing in recent months as the OPEC member's economy recovers from a slowdown in 2009, when prices fell 4.9 percent, data from the Qatar Statistics Authority showed.

Prices fell 0.8 percent year-on year in October.

Analysts expect the next few months to show a reversal of deflationary trends, leading to inflation.

"Deflation in housing rents in Qatar may have been overstating the true rate of deflation. That effect might be waning a little bit now," said Daniel Kaye, senior economist at National Bank of Kuwait.

"Across the Gulf the inflation rates have picked up over the last six months. But much of the increase has been related to higher global food prices, and that is beyond the ability of policymakers in the region to influence very much," he said.

Housing costs in the cash-rich Gulf state, which have the largest 32 percent weight in the overall basket, dropped just 0.1 percent on a monthly basis after holding steady for two consecutive months.

Transport and communication prices jumped 1.5 percent.

Analysts polled by Reuters expect average deflation of 2 percent for 2010 and a 3 percent inflation in 2011.

Qatar's economy is seen largely outperforming other Gulf oil energy producers with growth of 16 percent this year, up from 8.7 percent in 2009, due to an expansion of gas output and government infrastructure spending.

In Kuwait, inflation hit a 22-month high on a yearly basis in November, reaching 5.9 percent after a 5.1 percent rise in the previous month.

Inflation in Kuwait, the world's fourth largest oil exporter, has been accelerating this year as the oil-reliant economy recovers from last year's sharp contraction. Consumer prices last rose by an annual 5.9 percent in February 2009. Kazinform cites Arab News.

See www.arabnews.com for full version.