Kuwait Economic Forecast

Kuwait Economic Outlook

October 5, 2021

The economy likely recovered in Q2, as the annual decline in oil output moderated, while the non-oil sector benefited from stronger consumer spending growth—partly due to a low base effect, but also aided by the extension of the debt deferral program and looser restrictions. Turning to Q3, while activity likely lost momentum in annual terms amid a fading base effect, conditions should have improved on a sequential basis: Crude oil output picked up again in July–August, online spending remained red hot in the same period and household lending growth should have benefited from improving consumer confidence. Meanwhile, the government recently adopted a restructuring plan for the public sector for 2022–2025, aimed at disbanding some ministries, and changing laws around investment, foreign ownership, bankruptcy and public-private partnerships, which should support fiscal metrics over the medium term.

Kuwait Economic Growth

GDP should expand healthily this year due to stronger oil exports and private consumption as the impact of the health crisis fades. In 2022, growth should accelerate further on increased oil output and solid domestic demand. That said, ongoing concerns surrounding short-term liquidity needs amid political gridlock over debt financing pose a risk to the outlook. FocusEconomics analysts forecast GDP growth of 2.1% in 2021. In 2022, our panel expects growth of 4.8%, which is down 0.1 percentage points from the previous month.

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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