ShareBy Sajeev K Peter
KUWAIT: Kuwait's consumer inflation continues to remain decade-high with food prices hovering above pre-COVID levels amid a raging war in Ukraine and rising oil prices. As the holy month of Ramadan approaches, inflation has become severe, as most household staples such as vegetables, fruits, meat and fish stubbornly edged higher in the last few weeks.
Inflation in the country has been further compounded by Russia's invasion of Ukraine, as the war has thrown global food supply chains out of gear, experts say. According to the latest report by the Kuwait Central Statistical Bureau, the annual inflation rate in Kuwait stood at 4.30 percent in January 2022, unchanged from December 2021, which is the highest level since October 2011.
Kuwait's inflation has soared rapidly and has now become one of the highest among GCC countries, prompting changes in consumer behaviors for many families in Kuwait. Minister of Commerce and Industry Fahd Al-Shuraian recently warned about the serious developments that are taking place globally. "We are facing a global problem, and the situation in the world is now dangerous. We may go through a difficult period if we do not prepare ourselves for such a situation. However, the government is always there and will do its best to bear the differences in prices that occur due to shipping or transportation," he assured.
"Everything is very costly now. Prices of meat, milk and fish have skyrocketed. Egg prices also have gone up a bit. We are cutting back on all non-essential stuff in our family budget," said Amelia Fernandez, an expat resident. She, like many others, expected prices would go back to pre-COVID levels since the pandemic has subsided. But, not only retailers did not roll back the prices, they hiked the prices of most essential commodities.
Prices have increased faster for food and beverages (7.26 percent vs 7.20 percent in December), transport (4.62 percent vs 4.54 percent), and furnishing and household equipment (2.44 percent vs 2.36 percent), while housing inflation was steady at 2.35 percent. Prices of clothing continued to rise from 5.46 percent to 5.66 percent, according to official estimates.
"This persistent inflation is probably a little more problematic now as it's not only coming from the supply side. It should also be viewed in the context of the current war in Ukraine," said Rashid Alhusaini, a Kuwaiti entrepreneur. While consumers grapple with rising prices of essentials, retailers continue to face the prospect of supply chain constraints and labor shortages induced by the pandemic. According to reports, market observers warned that up to 300,000 different commodities, whose prices are fixed by the Union of Consumer Cooperative Societies, may witness a spike when the Competition Protection Law is enforced. The law prohibits setting a minimum price.
"These days, I buy meat and fish only when there is a promotion in supermarkets," said Yunus Azeez, an expat who works in a travel agency and has a household of seven family members. Lower-wage workers and lower-income households are bearing the brunt of the higher prices of essentials such as groceries, transportation and housing, making it hard for them to escape the budgetary sting. "The supply chain disruptions caused by the pandemic may be further worsened by the current war in Ukraine and the subsequent economic consequences. Definitely, there will be a cascading effect of the war," said a university professor on condition of anonymity.
