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 165 billion in 2023.
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.
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
GDP likely shrank at its fastest rate in five years during Q1 due to regional conflict. The closure of the Strait of Hormuz pushed the state-owned energy firm to halt some of its activities, causing oil output to drop 13%. In addition, the non-energy economy was affected by infrastructure damage due to Iranian drone strikes, which also led to grounded flights, closed schools and a broad deterioration in confidence. Our panelists project a roughly 30% fall in Q2 GDP, as conflict continues to choke crude production and restrain non-oil activity. The country pumped only 0.6 million barrels per day of crude in April–May, less than a quarter of pre-war volumes. In the same period, the PMI survey evidenced deteriorating operating conditions among private-sector non-oil firms. That said, the Central Bank’s credit-support scheme and higher public capital expenditure should be providing support.Kuwait Economic Forecasts
Projections out to 2035.49 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 2035 on 49 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.
Kuwait Economic Indicators
| 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|---|
| Population (million) | 4.3 | 4.4 | 4.8 | 4.9 | 5.0 | 5.1 |
| GDP (USD bn) | 111 | 148 | 183 | 165 | 161 | 157 |
| GDP per Capita (USD) | 25,561 | 33,815 | 38,271 | 33,654 | 32,083 | 30,716 |
| GDP (KDW bn) | 34.0 | 44.7 | 56.2 | 50.8 | 49.3 | 48.2 |
| Economic Growth (Nominal GDP, ann. var. %) | -20.5 | 31.6 | 25.6 | -9.6 | -2.9 | -2.4 |
| Economic Growth (Real GDP, ann. var. %) | -4.8 | 1.7 | 6.8 | -1.6 | -1.5 | 2.7 |
| Economic Growth (Real GDP Oil, ann. var. %) | -8.5 | -0.9 | 12.1 | -4.2 | -6.7 | 2.5 |
| Domestic Demand (ann. var. %) | -15.5 | 6.8 | 9.6 | 1.7 | -2.8 | 2.5 |
| Private Consumption (ann. var. %) | -11.3 | 7.6 | 1.7 | 2.5 | 2.6 | 2.6 |
| Government Consumption (ann. var. %) | -2.3 | 9.1 | 0.9 | 4.2 | 2.3 | 2.4 |
| Total Investment (ann. var. %) | -35.5 | 1.4 | 41.8 | -2.6 | -18.3 | 3.4 |
| Exports (G&S, ann. var. %) | -2.9 | -3.2 | 15.3 | 2.4 | -3.2 | 3.4 |
| Imports (G&S, ann. var. %) | -26.4 | 3.9 | 33.2 | 13.4 | -7.1 | 2.6 |
| Oil Production (mn barrels per day, aop) | 2.44 | 2.41 | 2.70 | 2.59 | 2.42 | 2.47 |
| Unemployment (% of active population, aop) | 3.5 | 3.0 | 2.1 | 2.1 | 2.2 | 2.2 |
| Fiscal Balance (% of GDP) | -31.7 | -6.7 | 11.4 | -3.1 | -2.1 | -7.6 |
| Public Debt (% of GDP) | 10.2 | 7.2 | 2.9 | 3.2 | 3.0 | 11.6 |
| Money (ann. var. of M2 %) | 2.7 | -7.4 | 6.5 | 1.0 | 4.3 | 3.6 |
| Inflation (CPI, ann. var. %, aop) | 2.1 | 3.4 | 4.0 | 3.6 | 2.9 | 2.4 |
| Discount Rate (%, eop) | 1.50 | 1.50 | 3.50 | 4.25 | 4.00 | 3.50 |
| Exchange Rate (KWD per USD, eop) | 0.30 | 0.30 | 0.31 | 0.31 | 0.31 | 0.31 |
| Current Account Balance (USD bn) | 22.1 | 34.9 | 63.1 | 51.4 | 46.7 | 36.5 |
| Current Account Balance (% of GDP) | 19.9 | 23.5 | 34.4 | 31.1 | 29.0 | 23.2 |
| Merchandise Trade Balance (USD bn) | 15.4 | 40.5 | 71.9 | 51.1 | 44.0 | 34.0 |
| Merchandise Exports (USD bn) | 40.1 | 68.4 | 100.3 | 84.1 | 77.4 | 70.5 |
| Merchandise Imports (USD bn) | 24.8 | 27.9 | 28.4 | 33.0 | 33.4 | 36.0 |
| Merchandise Exports (ann. var. %) | -38.0 | 70.4 | 46.6 | -16.1 | -7.9 | -9.0 |
| Merchandise Imports (ann. var. %) | -15.7 | 12.4 | 1.8 | 16.4 | 1.3 | 7.7 |
| Foreign Direct Investment (USD bn) | 0.2 | 0.6 | 0.8 | 2.1 | 0.6 | - |
| International Reserves (USD bn) | 48.2 | 45.0 | 48.0 | 47.5 | 44.2 | 40.8 |
| International Reserves (months of imports) | 23.4 | 19.4 | 20.3 | 17.3 | 15.9 | 13.6 |