Middle East and Central Asia > Kuwait

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International Monetary Fund. Middle East and Central Asia Dept.
Sustained political gridlock has hobbled reforms and increased macroeconomic vulnerabilities, but a new high-level effort offers hope for resolving the impasse. The authorities have been preparing a comprehensive reform plan which, if adopted by parliament, would pave the way to address the structural and fiscal imbalances in the economy and promote sustainable and inclusive growth. The authorities responded swiftly and decisively to the COVID-19 crisis with social distancing restrictions and fiscal, monetary, and financial policy support measures. In 2021, a high rate of vaccination was achieved, although there has been a major surge in infections with the recent arrival of the Omicron variant. A nascent economic recovery is underway, supported by higher oil prices and some relaxation of mobility restrictions. However, substantial uncertainties to the economic outlook underscore the importance of phasing out COVID-19 relief measures at a measured pace as the economy recovers, and of accelerating the reform momentum to limit risks and rebuild buffers. Banks entered the crisis from a position of strength and have remained well capitalized and highly liquid.
International Monetary Fund. Middle East and Central Asia Dept.
This Article IV Consultation highlights that growth has strengthened, and fiscal and external positions improved due to higher oil prices. The increased uncertainty about oil price prospects though underscores the need to reduce dependence on oil and increase savings for the future. The key priority is to build national consensus around equitable and well-sequenced reforms to underpin fiscal consolidation and promote the private sector. While authorities’ efforts to strengthen the fiscal accounts are welcomed, more ambitious reforms will be needed to secure adequate savings for future generations and reduce financing needs. Reforming the public wage bill, subsidies, and transfers, raising non-oil revenue, and enhancing the fiscal policy framework and governance are expected to support fiscal consolidation and increase the efficiency of spending on human and physical capital. Creating jobs for the large number of nationals joining the labor force over the next decade hinges on the emergence of a vibrant private sector.
International Monetary Fund. Middle East and Central Asia Dept.
This 2017 Article IV Consultation highlights that non-oil growth in Kuwait has picked up modestly over the past two years, and inflation has moderated. After coming to a standstill in 2015, real non-hydrocarbon growth has recovered and is set to reach 2.5 percent in 2018, driven by improved confidence. Notwithstanding the impact of higher energy and water prices, inflation is on track to reach a multiyear low of 1.75 percent in 2017, owing to a decline in housing rents and favorable food price developments. The government’s underlying fiscal position has improved on the back of spending restraint, but financing needs have remained large.
International Monetary Fund. Middle East and Central Asia Dept.
This 2016 Article IV Consultation highlights that the economic activity in the non-oil sector in Kuwait has continued to expand, albeit at a slower pace, reflecting the impact of lower oil prices. Nonhydrocarbon growth slowed from 5 percent to an estimated 3.5 percent in 2015, as higher uncertainty weighed on consumption. Labor market reforms and efforts to promote the role of the private sector are important to foster diversification and boost job creation for nationals. Better aligning labor market incentives is necessary to encourage nationals to take on private sector jobs and private firms to create opportunities for them.
International Monetary Fund
The 2012 Article IV Consultation discusses the economic outlook for Kuwait for 2012, which is broadly positive. Economic recovery is expected to strengthen, led by high government expenditure—particularly wages and capital expenditure. High fiscal and external surpluses are expected to persist. Inflation is projected to moderate slightly owing to a decline in global food inflation. The authorities are encouraged to continue to be vigilant regarding existing and emerging risks, enhance investment companies’ (ICs) supervision, and develop the needed tools for ICs resolution.
International Monetary Fund
Statistics of Kuwait’s economics are presented in this paper. Some of the areas covered include gross domestic product prices, gross domestic expenditure; production, disposal, and prices of oil, and LPG consumer. Data on population and employment, summary of government finance, revenue, current expenditure, domestic subsidies and transfers are provided. The monetary survey balance sheet of local banks, interest rates with local banks, and net foreign assets of the financial sector as well as financial soundness indicators, external debt, and international investment position data are presented.
International Monetary Fund
Kuwait faced the global financial crisis from a position of strength, owing to expansionary fiscal stance. The economy is expected to grow steadily over the medium term as Kuwait continues to implement the development plan and global recovery supports demand for oil. The near-term macroeconomic policy mix is adequate. The development plan (DP) implementation should be managed carefully. The financial situation of many investment companies remains precarious. Significant progress was made in the implementation of the update recommendations, but further steps are warranted.
International Monetary Fund
Kuwait’s economy was affected significantly by the global crisis. The financial sector experienced funding pressures and deterioration in asset quality. The economic outcome depends largely on government spending and the associated private investment. Stress tests indicate that the banking system can withstand shocks. The macroeconomic policy mix is adequate, but growth of current expenditures should be contained. Successful implementation of the growth agenda requires progress in structural reforms. The financial system’s oversight framework should be strengthened. The household debt relief law can undermine the financial culture.
International Monetary Fund
The Statistical Appendix of Kuwait discusses the basic social and demographic indicators, selected economic indicators, GDP, balance of payments, gross domestic expenditure, LPG and oil production, disposal, and prices, consumer price index, wholesale price index, industrial output, agricultural and fisheries production, population and employment, government revenue, import and export, bank credit and interest rates, monetary accounts and monetary survey, and summary of government finance for the period 2001–07.
International Monetary Fund
In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.