Kuwait Economic Outlook
An oil-rich economy with limited diversification:
Kuwait’s economy is heavily dependent on oil, which accounts for around 90% of government revenue and 50% of GDP. The country holds some of the world’s largest oil reserves and has one of the highest GDP per capita figures in the Middle East. High global oil prices have provided fiscal stability, but Kuwait remains vulnerable to energy market fluctuations. Unlike some of its Gulf neighbors, Kuwait has been slow to diversify away from hydrocarbons.
Challenges in economic reform:Efforts to reduce reliance on oil have been hindered by political gridlock, as tensions between the government and parliament have stalled major economic reforms and investment initiatives. That said, reform prospects improved after parliament was suspended in 2024 by the emir. While Kuwait’s sovereign wealth fund, the Kuwait Investment Authority, has significant assets to cushion against economic shocks, long-term fiscal sustainability will require reforms, including privatization and labor market modernization.
Public sector dominance and labor market imbalances:Kuwait has one of the largest public sectors in the world, with a majority of citizens employed by the government. This has led to inefficiencies and put pressure on public finances. Expatriates make up most of the private-sector workforce, while Kuwaitis tend to prefer government jobs, creating imbalances in the labor market. Increasing private-sector participation and encouraging entrepreneurship remain key economic challenges.
Kuwait’s economic outlook:Kuwait’s economy will continue to be shaped by oil price trends, with modest non-oil sector growth expect. While strong financial reserves provide stability, the recently slow pace of economic reform poses a risk to long-term growth. Diversification, infrastructure investment, and a more dynamic private sector will be essential to securing Kuwait’s economic future beyond hydrocarbons.
Kuwait's Macroeconomic Analysis:
Nominal GDP of USD 160 billion in 2024.
Nominal GDP of USD 165 billion in 2023.
Nominal GDP of USD 165 billion in 2023.
GDP per capita of USD 33,638 compared to the global average of USD 10,589.
GDP per capita of USD 33,638 compared to the global average of USD 10,589.
GDP per capita of USD 31,944 compared to the global average of USD 10,589.
Average real GDP growth of 0.3% over the last decade.
Average real GDP growth of 0.7% over the last decade.
Average real GDP growth of 0.7% over the last decade.
Sector Analysis
In 2020, services accounted for 43.6% of overall GDP, manufacturing 6.9%, other industrial activity 49.1%, and agriculture 0.4%. Looking at GDP by expenditure, private consumption accounted for 40.6% of GDP in 2019, government consumption 24.8%, fixed investment 24.6%, and net exports 10.0%.International trade
In 2022, manufactured products made up 3.4% of total merchandise exports, mineral fuels 96.0%, food 0.4%, ores and metals 0.1% and agricultural raw materials 0.0%, with other categories accounting for 0.1% of the total. In the same period, manufactured products made up 74.6% of total merchandise imports, mineral fuels 0.5%, food 17.7%, ores and metals 2.7% and agricultural raw materials 0.6%, with other goods accounting for 3.9% of the total. Total exports were worth USD 84.10 billion in 2023, while total imports were USD 33 billion.Main Economic Indicators
Economic growthThe economy recorded average annual growth of 0.7% in the decade to 2023. To read more about GDP growth in Kuwait, go to our dedicated page.
Fiscal policy
Kuwait's fiscal deficit averaged 7.1% of GDP in the decade to 2023. Find out more on our dedicated page.
Unemployment
The unemployment rate averaged 2.5% in the decade to 2023. For more information on Kuwait's unemployment click here.
Inflation
Inflation averaged 2.7% in the decade to 2024. Go to our Kuwait inflation page for extra insight.
Monetary Policy
Kuwait's monetary policy rate ended 2024 at 4.00%, up from 2.00% a decade earlier. See our Kuwait monetary policy page for additional details.
Exchange Rate
From end-2014 to end-2024 the dinar stayed on the same level vs the U.S. dollar. For more info on the dinar, click here.
Economic situation in Kuwait
After contracting last year as OPEC+ oil output cuts outweighed sluggish non-oil sector expansion, our Consensus is for the economy to have returned to growth so far in 2025. The oil sector downturn has eased due to the gradual lifting of OPEC+ cuts plus a low base of comparison. Moreover, survey data of firms suggests that the non-oil private sector has gained steam in 2025 compared to 2024; accelerating business and household credit in the year to date corroborates this picture. In politics, the government recently began the process for a USD 6 billion bond sale, which would mark the first foray into global debt markets since 2017. This should help support economic diversification efforts, and comes after a law was approved earlier this year authorizing new borrowing.Kuwait Economic Forecasts
Projections out to 2034.50 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 22 expert analysts.
Want to get insight on the economic outlook for Kuwait in the coming years? FocusEconomics collects projections out to 2034 on 50 economic indicators for Kuwait from a panel of 22 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Kuwait economy. To download a sample report on the Kuwait's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.