KUWAIT CITY: Despite the significant rise in inflation rates worldwide and reaching new records that exhausted peoples and economies, Kuwait was able to slow down inflation locally due to its robust social security safety network and government support.

According to the annual plan follow-up report (2023/2024) issued by the General Secretariat of the Supreme Council for Planning and Development recently, the domestic inflation growth rate for 2023 slowed to about 3.6 percent following the decrease in global inflation rates. The report said that the Central Bank of Kuwait has taken many monetary policies since 2019, as the interest rate was 2.94 percent. It decreased in 2020 and 2021 to 1.79 and 1.5 percent respectively, then it rose again in 2022 and 2023 to about 2.35 percent and 4.13 percent.

It noted that the Central Bank of Kuwait took these decisions and measures to change local interest rates based on an analysis of the latest available economic, monetary, and banking information and data, including general economic rates inflation levels, and local liquidity indicators, as they are the most important factors that determine the need to move interest rates. The report stated that the decision has been made after considering various elements affecting the consumer price index to identify and evaluate the factors that constitute pressure on prices, as well as taking into account the nature of the Kuwaiti economy that is open to the outside world.

Demand rates for goods and services: The report said that 2019 witnessed an increase of 0.3 percent, while it recorded a shrinkage in 2020 by (-3.4) percent, after which demand increased clearly at about 6.8 percent and continued to rise in 2022 to about 8.5 percent. It added that in 2023, the demand rate growth had decreased to about 3.2 percent, while the level of supply of goods and services was affected by geopolitical developments, which was reflected in the rise in production costs due to the rise in energy prices. Moreover, the report said that Inflation was able to maintain acceptable levels during the fiscal years, in light of the relative stability of indicators of the commodity groups that affect the living expenditure of families, which in turn determines the capacity of consumer spending and services for members of society. 

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