Kuwait Economic Forecast

Kuwait Economic Outlook

May 10, 2022

Economic activity likely expanded in annual terms in Q1 on growth in oil production as OPEC+ curbs were eased. A surge in Covid-19 cases and some ensuing restrictions will have capped non-oil momentum early in the quarter. However, restrictions were eased markedly from mid-February as Covid-19 cases fell, which should have aided non-oil growth towards the end of Q1. Turning to Q2, the oil sector will be benefiting from the rollback of OPEC+ cuts, while tourism is likely being boosted by the recent scrapping of entry requirements for visitors. Moreover, surging oil prices are buoying public coffers and could support public spending. In politics, the government resigned in early April ahead of a no-confidence vote in parliament. Political instability will hinder important reforms ahead—including the approval of a debt law, which would allow the country to tap international bond markets.

Kuwait Economic Growth

GDP growth should pick up this year due to higher oil output and prices, and as domestic demand benefits from the ebbing impact of Covid-19. Slow progress on reforms in areas such as economic diversification, fiscal management, labor markets and the housing sector, due to frequent frictions between the executive and the legislature, is an important risk. FocusEconomics analysts forecast GDP growth of 6.8% in 2022, which is up 0.7 percentage points from last month’s prediction. In 2023, our panel expects growth of 3.4%.

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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