Kuwait Economic Outlook
July 7, 2020
Economic activity appears likely to have contracted markedly in the first half of the year, as the twin impacts of the coronavirus pandemic and low oil prices wreaked havoc on the economy. Containment measures—including strict curfews, restricted travel and closure of non-essential businesses—put in place to curb the spread of the virus will have curtailed private-sector activity though April–June. Meanwhile, the oil sector is set to be rocked further by the latest round of OPEC+ production cuts, after oil production slumped to a near decade low in May. Moving into the third quarter, conditions appear muted despite the easing of curfew restrictions at the start of July, as lower oil revenues inhibit the government’s ability to counter the ongoing economic impacts of the pandemic.Kuwait Economic Growth
This year, activity is expected to slow markedly as slack oil demand and constrained household consumption weigh on the economy. Uncertainty regarding future demand for crude oil is a key risk to the external sector, while regional geopolitical tensions and the government’s push to reduce Kuwait’s dependence on foreign workers further cloud the outlook. FocusEconomics analysts forecast a contraction of 4.6% in 2020, which is down 0.1 percentage points from last month’s forecast, and growth of 2.9% in 2021.Kuwait Economy Data
| 2015 | 2016 | 2017 | 2018 | 2019 | |
|---|---|---|---|---|---|
| Population (million) | 4.2 | 4.3 | 4.5 | 4.6 | 4.7 |
| GDP per capita (USD) | 27,261 | 25,301 | 27,099 | 30,673 | 28,639 |
| GDP (USD bn) | 114 | 110 | 121 | 140 | 135 |
| Economic Growth (GDP, annual variation in %) | 0.6 | 2.9 | -4.7 | 1.2 | 0.4 |
| Consumption (annual variation in %) | 1.5 | 1.0 | 3.0 | 5.7 | - |
| Investment (annual variation in %) | - | - | - | - | - |
| Unemployment Rate | 2.2 | 2.2 | 1.8 | 2.1 | 2.2 |
| Fiscal Balance (% of GDP) | -13.4 | -13.9 | -8.9 | -3.0 | - |
| Inflation Rate (CPI, annual variation in %) | 3.7 | 3.5 | 1.5 | 0.6 | 1.1 |
| Policy Interest Rate (%) | 2.25 | 2.50 | 2.75 | 3.00 | 2.75 |
| Exchange Rate (vs USD) | 0.30 | 0.31 | 0.30 | 0.30 | 0.30 |
| Exchange Rate (vs USD, aop) | 0.30 | 0.30 | 0.30 | 0.30 | 0.30 |
| Current Account (% of GDP) | 3.5 | -4.6 | 8.0 | 14.5 | - |
| Current Account Balance (USD bn) | 4.0 | -5.1 | 9.6 | 20.3 | - |
| Trade Balance (USD billion) | 27.8 | 19.5 | 25.7 | 40.8 | - |
| Exports (USD billion) | 54.2 | 46.6 | 55.2 | 72.1 | - |
| Imports (USD billion) | 26.4 | 27.0 | 29.5 | 31.3 | - |
| Exports (annual variation in %) | -48.7 | -14.1 | 18.5 | 30.7 | - |
| Imports (annual variation in %) | -3.1 | 2.3 | 9.1 | 6.0 | - |
| International Reserves (USD) | 28.4 | 31.1 | 33.7 | 37.1 | 39.9 |
| External Debt (% of GDP) | 35.7 | 38.5 | 45.6 | - | - |
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Kuwait Facts
| Value | Change | Date | |
|---|---|---|---|
| Exchange Rate | 0.30 | -0.05 % | Dec 31 |
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