Kuwait Economic Forecast

Kuwait Economic Outlook

October 6, 2020

Economic activity likely remained downbeat in Q3 after lower oil production and prices, coupled with lockdown measures, should have weighed heavily on GDP in Q2. In July–August, EIA data showed oil production year-on-year declined at a significantly sharper pace compared to Q2. In other news, in early September parliament approved the state budget for the current fiscal year (April 2020–March 2021), which projects a USD 46 billion fiscal deficit. The lack of a new public debt law and lower oil prices led to an expenditure cut of USD 1 billion since the first proposal back in January. Consequently, on 23 September, Moody’s downgraded its credit rating to ‘A1’ from ‘Aa2’ with a stable outlook, citing heightened government liquidity risks. Meanwhile, the head of state Sheikh Sabah al-Ahmad al-Sabah passed away on 29 September, with the cabinet naming his chosen appointee, Crown Prince Sheikh Nawaf al-Ahmad al-Sabah, as his successor.

Kuwait Economic Growth

The economy is set to shrink notably this year as depressed domestic demand and lower oil production weigh on activity. Moreover, lower oil prices have strained government finances, while travel and visa restrictions have hampered the labor market. Next year, the economy is expected to rebound on the back of stronger exports and recovering private consumption. FocusEconomics analysts forecast a contraction of 5.3% in 2020, and growth of 2.7% in 2021, which is unchanged from last month’s forecast.

Kuwait Economy Data

2015 2016 2017 2018 2019
Population (million)
GDP per capita (USD)27,26125,30127,09930,67328,639
GDP (USD bn)114110121140135
Economic Growth (GDP, annual variation in %)0.62.9-
Consumption (annual variation in %)  
Investment (annual variation in %)-  -  -  -  -  
Unemployment Rate2.
Fiscal Balance (% of GDP)-13.4-13.9-8.9-3.0-  
Inflation Rate (CPI, annual variation in %)
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-  
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 %)-  
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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