Kuwait Economic Forecast

Kuwait Economic Outlook

September 7, 2021

The economy likely gained notable steam in Q2 due to a recovery in both the oil and non-oil sectors. The annual decline in oil output moderated notably in the period, in line with OPEC’s decision to ease production cuts. In the non-oil sector, consumer spending growth surged—partly due to a low base effect, but also aided by the extension of the debt deferral program and the easing of restrictions. Turning to Q3, while activity will likely lose momentum in annual terms as the base effect fades, conditions should be improving on a sequential basis: Crude oil production picked up again in July, online spending hit a record high in the same month and household lending growth should be benefiting from improving consumer confidence. In other news, recent data showed that the budget deficit swelled to a record high in the fiscal year ending March 2021, further complicating the ongoing debt financing conundrum.

Kuwait Economic Growth

GDP should expand at a healthy pace this year due to stronger oil exports and private consumption as the impact of the health crisis fades and foreign demand improves. That said, uncertainty over new variants of the virus and political deadlock over debt financing pose risks to the outlook. FocusEconomics analysts forecast GDP growth of 2.1% in 2021, which is unchanged from the previous month’s projection. In 2022, our panel expects growth of 4.9%.

Kuwait Economy Data

2015 2016 2017 2018 2019
Population (million)4.24.34.54.64.7
GDP per capita (USD)27,26125,30127,09930,67328,639
GDP (USD bn)114110121140135
Economic Growth (GDP, annual variation in %)0.62.9-4.71.20.4
Consumption (annual variation in %)1.51.03.05.7-  
Investment (annual variation in %)-  -  -  -  -  
Unemployment Rate2.22.21.82.12.2
Fiscal Balance (% of GDP)-13.4-13.9-8.9-3.0-  
Inflation Rate (CPI, annual variation in %)3.73.51.50.61.1
Policy Interest Rate (%)2.252.502.753.002.75
Exchange Rate (vs USD)0.300.310.300.300.30
Exchange Rate (vs USD, aop)0.300.300.300.300.30
Current Account (% of GDP)3.5-4.68.014.5-  
Current Account Balance (USD bn)4.0-5.19.620.3-  
Trade Balance (USD billion)27.819.525.740.8-  
Exports (USD billion)54.246.655.272.1-  
Imports (USD billion)26.427.029.531.3-  
Exports (annual variation in %)-48.7-14.118.530.7-  
Imports (annual variation in %)-3.12.39.16.0-  
International Reserves (USD)28.431.133.737.139.9
External Debt (% of GDP)35.738.545.6-  -  

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Kuwait Facts

Value Change Date
Exchange Rate0.30-0.05 %Dec 31

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