Kuwait Economic Forecast

Kuwait Economic Outlook

May 12, 2020

The economy contracted 1.1% in the final quarter of 2019, after expanding 0.1% in the third quarter, dragging down total growth for 2019 to 0.4% (2018: +1.2% year-on-year). Spearheading the downturn was evaporating growth in the non-oil sector, as trade and financial services suffered notable downturns. Meanwhile, the oil sector’s decline slowed in the fourth quarter as generally higher oil prices supported the sector. Turning to 2020, activity is set to be significantly impaired in the first half of the year: The fallout from the coronavirus pandemic is suppressing non-oil sector activity due to stringent lockdown measures, while historically low oil prices and recently-agreed OPEC production cuts will be weighing heavily on the already-struggling oil sector.

Kuwait Economic Growth

The economy is expected to contract this year amid tumbling oil demand and deferred private consumption, while lower government revenues are likely to lead to a ballooning fiscal deficit. The duration of the pandemic, regional geopolitical tensions and volatile oil markets are key downside risks to the outlook. FocusEconomics analysts forecast a contraction of 2.9% in 2020, which is down 3.6 percentage points from last month’s forecast, and growth of 2.4% in 2021.

Kuwait Economy Data

2014 2015 2016 2017 2018
Population (million)4.04.24.34.54.6
GDP per capita (USD)40,69427,26125,30127,11530,736
GDP (USD bn)164114110121141
Economic Growth (GDP, annual variation in %)0.50.62.9-4.71.2
Consumption (annual variation in %)2.61.51.03.05.7
Investment (annual variation in %)-  -  -  -  -  
Unemployment Rate2.92.22.22.02.1
Fiscal Balance (% of GDP)7.6-13.4-13.9-8.9-3.0
Inflation Rate (CPI, annual variation in %)2.93.73.51.50.6
Policy Interest Rate (%)2.002.252.502.753.00
Exchange Rate (vs USD)0.290.300.310.300.30
Exchange Rate (vs USD, aop)0.280.300.300.300.30
Current Account (% of GDP)33.43.5-4.68.014.5
Current Account Balance (USD bn)55.04.0-5.19.620.3
Trade Balance (USD billion)78.327.819.525.740.8
Exports (USD billion)10654.246.655.272.1
Imports (USD billion)27.326.427.029.531.3
Exports (annual variation in %)-8.2-48.7-14.118.530.7
Imports (annual variation in %)7.2-3.12.39.16.0
International Reserves (USD)32.228.431.133.737.1
External Debt (% of GDP)14.735.738.545.6-  

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Kuwait Facts

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

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