JEDDAH, Saudi Arabia, Sept 7 (Reuters) - Kuwait's inflation is not a concern this year but a planned increase in the government's spending may raise price pressures in the future, Finance Minister Mustapha al-Shamali said on Monday.
Inflation in the world's fourth largest oil exporter climbed to a nearly one-year high of 3.4 percent year-on-year in June, fuelled by a jump in housing costs.
When asked if he was worried about accelerating consumer price growth this year, Shamali said: 'No.'
'There could be an impact from the development plan,' he told reporters on the sidelines of a meeting of Gulf Arab finance and foreign ministers in Saudi Arabia late on Monday.
In February, Kuwait's parliament approved a 30 billion dinar ($104.3 billion) four-year development plan aimed at decreasing the Gulf Arab state's dependence on oil.
Kuwait's central bank governor Sheikh Salem Abdul-Aziz al-Sabah said in April he saw the IMF's 2010 inflation forecast of 4.8 percent as quite reasonable.
Shamali also said Kuwait's economy had recovered from last year's crisis and liquidity in the banking system was good.
The global downturn hit Kuwait harder than other Gulf states in 2009, when the real gross domestic product is estimated to have shrunk by 4.6 percent, as its economy is heavily reliant on the volatile hydrocarbon sector.
A Reuters poll forecast inflation in the OPEC member country at 4.0 percent for the full year of 2010, the same as last year, while the GDP was seen rising by 3.0 percent .
Fitch Ratings said last month that most Kuwaiti banks' profitability will remain pressured by high impairment charges this year although a significant weakening in asset quality is not expected for the remainder of 2010.
(Reporting by Ulf Laessing; Writing by Martin Dokoupil; Editing by Firouz Sedarat and Diane Craft)
($1=.2875 Kuwaiti Dinars) Keywords: KUWAIT FINMIN/ (ulf.laessing@thomsonreuters.com; +966 1 463 2603; Reuters Messaging: ulf.laessing.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Inflation in the world's fourth largest oil exporter climbed to a nearly one-year high of 3.4 percent year-on-year in June, fuelled by a jump in housing costs.
When asked if he was worried about accelerating consumer price growth this year, Shamali said: 'No.'
'There could be an impact from the development plan,' he told reporters on the sidelines of a meeting of Gulf Arab finance and foreign ministers in Saudi Arabia late on Monday.
In February, Kuwait's parliament approved a 30 billion dinar ($104.3 billion) four-year development plan aimed at decreasing the Gulf Arab state's dependence on oil.
Kuwait's central bank governor Sheikh Salem Abdul-Aziz al-Sabah said in April he saw the IMF's 2010 inflation forecast of 4.8 percent as quite reasonable.
Shamali also said Kuwait's economy had recovered from last year's crisis and liquidity in the banking system was good.
The global downturn hit Kuwait harder than other Gulf states in 2009, when the real gross domestic product is estimated to have shrunk by 4.6 percent, as its economy is heavily reliant on the volatile hydrocarbon sector.
A Reuters poll forecast inflation in the OPEC member country at 4.0 percent for the full year of 2010, the same as last year, while the GDP was seen rising by 3.0 percent .
Fitch Ratings said last month that most Kuwaiti banks' profitability will remain pressured by high impairment charges this year although a significant weakening in asset quality is not expected for the remainder of 2010.
(Reporting by Ulf Laessing; Writing by Martin Dokoupil; Editing by Firouz Sedarat and Diane Craft)
($1=.2875 Kuwaiti Dinars) Keywords: KUWAIT FINMIN/ (ulf.laessing@thomsonreuters.com; +966 1 463 2603; Reuters Messaging: ulf.laessing.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.