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Kuwait lawmakers urge govt to curb inflation
Real estate news By Peninsula On-line
10/3/2007 1:34:46
Kuwaiti lawmakers are calling on the government to curb rising prices after spiralling food and housing costs fuelled inflation in the state. Inflation came off 12-year highs and eased to 4.36 per cent in June but has become a political issue in Middle East’s fourth-largest oil producer, which imports most goods and where the government is sharing massive oil revenues with citizens. The government said last month it would investigate a jump in property prices after housing costs surged in July. On average, the value of real estate sales gained 67 per cent in the first eight months of 2007, according to National Bank of Kuwait.
Islamist MP Nasser Al Sanaa said 20 of the parliament’s 50 members had signed a motion to debate measures to curb inflation on November 8. “The reason for the meeting is ... to stop price hikes and also find an appropiate mechanism to achieve price stability,” Sanaa said, adding that consumers needed better protection against price increases. Kuwaiti newspapers are full of stories of people complaining about rising prices in supermarkets, mostly for food. “Parliament wants to satisfy voters ... but the government can’t do anything about it. It’s imported,” said Naser Al Nafisi, General Manager at Al Joman Centre for Economic Consultancy in Kuwait.
But he said the government might try to sell land plots more cheaply to combat rising real estate prices as it owned 90 per cent of the Gulf Arab state’s land. “Here they can do something, not a very big effect, but something,” Nafisi said. Lawmakers on July 11 urged the government to allow the dinar currency to reflect the real value of the tumbling US dollar, heralding an appreciation of the dinar a day later by the central bank. In total, the dinar has risen 3.49 per cent since May 19, a day before the central bank dropped its peg to the weakening dollar and adopted a basket of currencies. Key government reform projects such as a bill to slash tax on foreign companies and an exploration of the northern oil fields have been held up in parliament for a long time.
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