Kuwait Economic Forecast

Kuwait Economic Outlook

July 31, 2018

Economic growth likely firmed up in Q2 and the start of Q3, after Q1’s modest recovery. Following OPEC’s decision to raise oil production starting in July, Kuwait has begun to ramp up exports, as deals to increase supply of light crude oil to several Asian countries are underway. The economy continues to benefit from the oil price rally, which should improve both the fiscal and current account balances. Improved dynamics in the oil sector, however, could result in further delays in economic reforms aimed at bolstering the non-oil economy; parliament has shown reluctance to impose reforms, including the introduction of a VAT.

Kuwait Economic Growth

With the economic recovery well underway, the outlook for this year and next remains positive. Stronger domestic demand, underpinned by a pick-up in both fixed investment and private consumption, should bolster growth. Furthermore, increased oil production and higher oil prices will also propel momentum. However, diversification efforts could dissipate in the wake of a stronger oil sector and drag on the non-oil economy. Met the why particular panelists expect growth of 2.1% in 2018, up 0.1 percentage points from last month’s forecast, and 3.0% in 2019.

Kuwait Economy Data

20132014201520162017
Population (million)3.94.04.24.34.4
GDP per capita (USD)44,48811,24827,01425,85927,260
GDP (USD bn)173163115111120
Economic Growth (GDP, annual variation in %)1.20.50.63.5-2.9
Consumption (annual variation in %)5.62.61.54.8-  
Investment (annual variation in %)8.94.515.52.0-  
Unemployment Rate2.62.92.22.12.1
Fiscal Balance (% of GDP)22.219.9-11.9-  -  
Inflation Rate (CPI, annual variation in %)2.72.93.33.21.5
Policy Interest Rate (%)2.002.002.252.502.75
Exchange Rate (vs USD)0.280.290.300.310.30
Exchange Rate (vs USD, aop)0.280.280.300.300.30
Current Account (% of GDP)11.333.83.5-4.56.3
Current Account Balance (USD bn)69.855.04.0-5.07.6
Trade Balance (USD billion)89.678.327.820.123.5
Exports (USD billion)11511654.246.655.0
Imports (USD billion)25.427.326.426.431.5
Exports (annual variation in %)-3.8-8.2-48.7-14.118.2
Imports (annual variation in %)4.97.2-3.10.119.2
International Reserves (USD)29.532.228.431.133.7
External Debt (% of GDP)11.414.732.637.2-  

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Kuwait Facts

ValueChangeDate
Exchange Rate0.30-0.05 %Aug 15

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