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

Project Name 2014 2015e 2016f 2017f
Real GDP growth (%) -1.6% -1.3% 1.3% 1.6%
Inflation (%). 2.9% 3.3% 3.0% 3.0%
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