Dubai: Higher food prices drove Yemen’s annual inflation rate to a 10-month high of 11.3 per cent in February, central bank data showed on Monday.
Food inflation in the Arabian Peninsula state jumped to 14.3 per cent year on year and 1.8 per cent from January.
Overall inflation had fallen from a peak of 25 per cent in October 2011 as political unrest eased, helping the economy recover. But it picked up again to 7.1 per cent in January.
The central bank cut interest rates by 5 percentage points between last October and February to support the economic recovery. Its head said in April he was comfortable with the current level of rates — a three-year low of 15 per cent — and expected growth to accelerate to about 7 per cent in 2013 from 4.5 per cent in 2012.
The recovery remains fragile in the second-poorest Arab state after Mauritania. A third of Yemen’s population live on less than $2 a day, and unemployment is around 35 per cent.
The International Monetary Fund forecasts Yemen’s inflation to average 7.5 per cent in 2013, down from 10.2 per cent in 2012.
In February, annual consumer price growth without food and qat, a mild stimulant leaf that many of Yemen’s 25 million people chew daily, was 7.0 per cent, little changed from January.
