Kuwait Economic Forecast

Kuwait Economic Outlook

November 26, 2019

Economic momentum was likely fairly subdued in the third quarter and heading into the fourth quarter. Oil production continued to decline in annual terms through October, as Kuwait over-complied with OPEC+ production cuts, which will have hurt the energy sector. Moreover, credit growth ebbed slightly in the third quarter relative to Q2, which could have dampened the performance of the non-oil sector. That said, a solid labor market and still-low inflation should have supported private consumption. On the political front, the government resigned in mid-November after Parliament filed a no-confidence vote in the interior minister. Foreign minister Sheikh Sabah al-Khalid al-Sabah was swiftly appointed as the new prime minister. The economy is unlikely to be affected by the recent events.

Kuwait Economic Growth

In 2020, the economy is seen gaining momentum due to a modest recovery in the oil sector, although growth will remain mild. Volatile oil prices and possible further OPEC+ production cuts, combined with regional geopolitical tensions, pose downside risks to the outlook. FocusEconomics analysts expect growth of 2.2% in 2020, which is up 0.1 percentage points from last month’s forecast, and 2.6% in 2021.

Kuwait Economy Data

20132014201520162017
Population (million)3.94.04.24.34.5
GDP per capita (USD)44,48940,69427,26125,30126,840
GDP (USD bn)173164114110119
Economic Growth (GDP, annual variation in %)1.20.50.62.9-3.5
Consumption (annual variation in %)5.62.61.51.03.4
Investment (annual variation in %)-  -  -  -  -  
Unemployment Rate2.72.92.22.22.0
Fiscal Balance (% of GDP)26.17.6-13.4-13.9-9.0
Inflation Rate (CPI, annual variation in %)2.72.93.33.01.5
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)40.333.43.5-4.65.9
Current Account Balance (USD bn)69.855.04.0-5.17.1
Trade Balance (USD billion)89.678.327.819.525.6
Exports (USD billion)11510654.246.655.1
Imports (USD billion)25.427.326.427.029.5
Exports (annual variation in %)-3.8-8.2-48.7-14.118.3
Imports (annual variation in %)4.97.2-3.12.39.2
International Reserves (USD)29.532.228.431.133.7
External Debt (% of GDP)11.414.735.738.545.6

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Kuwait Facts

ValueChangeDate
Exchange Rate0.30-0.05 %Nov 21

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