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Kuwait Economic Forecast

Kuwait Economic Outlook

The economy has likely gone from one of the Middle East’s strongest last year to one of the region’s weakest this year, due to a sharp pullback in oil production and a lack of progress on growth-enhancing structural reforms. In January–July, oil output was down around 2% in annual terms, contrasting double-digit growth in 2022. Moreover, the non-energy sector is being hampered by higher interest rates and the fading of the post-pandemic boost to activity: The expansion in credit to households and businesses has eased so far in 2023, while real estate sales fell year on year in H1 by roughly 27%. On the fiscal front, parliament belatedly approved the FY 2023 (April 2023–March 2024) budget in August. The budget forecasts record-high expenditure, which should support domestic demand in the coming months but will likely lead to the fiscal balance slipping back into deficit.

Kuwait Inflation

Inflation dipped to 3.7% in July from 3.8% in June. Rising tourist arrivals and the Central Bank of Kuwait’s milder tightening cycle relative to its Gulf peers have likely contributed to keeping inflation fairly elevated in recent months. That said, inflation is still forecast to average below its 2022 level this year due to lower international commodity prices.

This chart displays Economic Growth (GDP, annual variation in %) for Kuwait from 2011 to 2020.

Kuwait Economic Data

2018 2019 2020 2021 2022
Population (million) 4.6 4.8 4.7 4.7 4.8
GDP (USD bn) 138 136 106 - -
GDP per capita (USD) 29,884 28,490 22,643 - -
GDP (KDW bn) 41.7 41.3 32.4 - -
Economic Growth (Nominal GDP, ann. var. %) 14.0 -0.9 -21.5 - -
Economic Growth (GDP, ann. var. %) 2.4 -0.6 -8.9 - -
Economic Growth (GDP Oil, ann. var. %) 2.4 -1.0 -8.9 - -
Domestic Demand (ann. var. %) 4.4 2.2 - - -
Private Consumption (ann. var. %) 4.0 2.3 - - -
Government Consumption (ann. var. %) 6.3 7.7 - - -
Total Investment (ann. var. %) 3.4 -2.6 - - -
Exports (G&S, ann. var. %) -0.4 -10.1 - - -
Imports (G&S, ann. var. %) 1.5 -10.4 - - -
Oil Production (mn barrels per day, aop) 2.7 2.7 2.4 2.4 2.7
Unemployment (% of active population, aop) 2.2 2.2 3.3 2.8 2.5
Fiscal Balance (% of GDP) -3.1 -9.5 -33.2 - -
Public Debt (% of GDP) 15.1 11.6 11.7 8.7 2.9
Money (ann. var. of M2 %) 4.0 -1.3 2.7 -7.4 6.5
Inflation (CPI, ann. var. %, aop) 0.6 1.1 2.1 3.4 4.0
Discount Rate (%, eop) 3.00 2.75 1.50 1.50 3.50
Exchange Rate (KWD per USD, eop) 0.30 0.30 0.30 0.30 0.31
Current Account Balance (USD bn) 25.7 32.6 22.1 34.9 63.1
Current Account Balance (% of GDP) 18.6 24.0 20.9 - -
Merchandise Trade Balance (USD bn) 46.4 35.3 15.4 40.5 71.9
Merchandise Exports (USD bn) 77.0 64.7 40.1 68.4 100.3
Merchandise Imports (USD bn) 30.6 29.4 24.8 27.9 28.4
Merchandise Exports (ann. var. %) 39.0 -16.0 -38.0 70.4 46.6
Merchandise Imports (ann. var. %) 3.8 -4.0 -15.7 12.4 1.8
Foreign Direct Investment (USD bn) 0.2 0.4 0.2 0.6 0.8
International Reserves (USD bn) 37.1 39.9 48.2 45.0 48.0
International Reserves (months of imports) 14.5 16.3 23.3 19.4 20.3

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