Kuwait - Economic overview and Infrastructure Projects Report
Kuwait's Current Economic Situation
The World Bank’s latest MENA Economic Monitor Report showed that Kuwait’s GDP contracted by an estimated 1.3% in 2015, following a 1.6% decline in 2014, while oil production dropped by 1.7% in 2015. Growth in the oil sector, which accounts for two-thirds of GDP, was affected by an ongoing dispute with Saudi Arabia over shared resources, leading to the closure of a neutral zone oilfield in mid-2015. Growth in the non-oil sector also moderated further in 2015 as the slump in global oil prices took a toll on sentiment and activity, particularly in real estate and construction. Inflation remains muted, averaging just 3.3 % in 2015.
Fiscal and current account pressures are increasing. Oil revenues, which have contributed to three-quarters of government income in recent years, fell by nearly 50% during 2015 in line with oil prices. With spending adjusting more slowly, Kuwait is expected to record its first fiscal deficit since 1999, at 3.6% of GDP in FY2015. The current account surplus has narrowed significantly from over 30% of GDP in 2014, but remains at 9.6 % of GDP in 2015. With the Kuwaiti dinar pegged to a basket of currencies dominated by the US dollar, the central bank raised its policy rate by 25 basis points to 2.25 % following the rate increase by the US Federal Reserve Bank in December 2015. Otherwise, private sector credit is growing at a moderate pace, mitigating concerns about financial risks.
Key Economic Indicators
|Real GDP growth (%)||-1.6%||-1.3%||1.3%||1.6%|
|Current account (% GDP).||18.7%||-3.6%||0.5%||4.0%|
|Fiscal balance (% GDP)||36.9%||9.6%||3.3%||11.3%|
Source:The World Bank
The full 9 page report is available to download for free and includes:
- Kuwait’s Current Economic Situation
- Key Infrastructure Projects in Kuwait
- Major Mega Infrastructure projects
Download the report