Kuwait - KUNA
Inflation rate in Kuwait averaged 2.9 percent in 2012 as interest rate is predicted to remain unchanged in the next years, the Kuwait Finance House (KFH) said in a report here Tuesday. Dwindling food prices and stable housing prices suppressed inflation down to 2.3 percent in January 2013 from 2.6 percent in December 2012, according to the report. The country\'s inflation rate is likely to remain under control this year, ranging between three and four percent, the KFH\'s report showed. Kuwait\'s monetary policy still follows in the footsteps of its American counterpart due to the link between the Kuwaiti dinar and the US dollar, it said, predicting interest rate to remain unchanged until mid-2015. The index of food prices, which is the second largest component of the Kuwaiti consumer price basket, dipped to one percent on an annual basis in January, which is the lowest pace in four years, it said. In its report, the KFH put the average inflation rate last year at 2.9 percent, which is lower than its 2011 figure hitting 4.8 percent. The country\'s inflation rate is expected to remain at controllable levels in 2013 and 2014, ranging between three and four percent as food and housing prices remain moderate and stable respectively. Interest rate is forecasted to remain unchanged until the US Federal Reserve stiffens its monetary policy mid-2015, it said, noting that in case of abrupt drop in interest rate, demand for loans will be high. Bank borrowing to the private sector remained moderate last year as the monthly hike in borrowing hit four percent on an annual basis compared to two percent in the corresponding period last year, the report concluded.