Mubasher: Kuwaiti inflation rate rose to 0.8% year-on-year in the first quarter of 2019, compared to 0.4% YoY in the last quarter of 2018, according to a report released on Saturday by the National Bank of Kuwait (NBK).

The rise in the inflation rate was lower than expected, which led the bank to downgrade its forecast for inflation for 2019.

Core inflation, which excludes food and housing, stabilised at 1.7% in the first three months of 2019.

“The rise in headline inflation in Q1 was due to base effects following price falls a year ago. Prices still fell month-on-month in two of the first three months of 2019, but the declines were on average smaller than last year,” the NBK revealed.

The bank lowered its forecast for 2019 inflation to 1.5% from 2% due to softer output in Q1-19.

Upward risks to the inflation outlook include a fall in the US dollar, which may push down dinar and boost consumer spending.

“Downward risks include renewed weakness in housing rents due to lingering vacancies and lower core inflation if economic growth disappoints,” the NBK noted.