Kuwait flag Kuwait: Economic outline

Economic Outline

Economic Indicators

Kuwait is a very rich country and has developed a welfare state for its nationals, who enjoy a very high per capita income. After growing 8.9% in 2022 amid high hydrocarbon prices, Kuwait experienced negative economic growth in 2023 (-0.6%) primarily attributed to reduced oil prices and OPEC+ production cuts, estimated at 4%. Oil, which constitutes nearly 50% of GDP, significantly impacted the economy. GDP growth is anticipated to rebound to 3.6% in 2024, driven by increased exports of crude oil and refined fuel, facilitated by the expanded refining capacity provided by the Al-Zour refinery (the total refining capacity is projected to rise to 1.4 million barrels per day in 2024, compared to an estimated 1.05 million in 2023, according to Coface). For 2025, the IMF forecasts growth at 4.1%.

Concerning public finances, the Ministry of Finance's draft budget anticipates a 13.5% reduction in Kuwait's budget deficit for the 2024-25 fiscal year. The expected deficit is set to reach KWD 5.89 billion (USD 19.15 billion), with total revenues estimated at KWD 18.6 billion, marking a 4.1% decrease from the previous fiscal year. Oil revenues are forecasted to amount to KWD 16.23 billion, down 5.4% from 2023-2024, based on an assumed oil price of USD 70 per barrel. Expenditure is projected to decrease by 6.6% to KWD 24.55 billion, with salaries and subsidies accounting for 79.4% of total expenses, while capital expenditure is expected to represent 9.3% of the total budget. Kuwait's fiscal and external balance sheets retain their position among the strongest globally. Fitch Ratings predicts that Kuwait's sovereign net foreign asset position will average 505% of GDP in 2023-24. The majority of these assets are held in the Future Generation Fund (FGF), overseen by the Kuwait Investment Authority (KIA), which also manages the assets of the General Reserve Fund (GRF), the government's treasury account. Gross government debt to GDP is currently low, standing at 8.7% of estimated GDP for the fiscal year ending March 2023. However, should a debt law be enacted in FY24 alongside limited fiscal reform and lower oil prices, Fitch Ratings predicts that government debt will more than double to 24% of GDP in FY25 and continue to rise in subsequent years due to projected fiscal deficits. According to the IMF, inflation was estimated at 3.4% in 2023 and should gradually decline to 3.1% this year and 2.8% in 2025, supporting private consumption.

The latest data from the Public Authority for Civil Information show that, as of June 2023, Kuwait faces unemployment challenges, with 31,831 individuals, both Kuwaiti and non-Kuwaiti, jobless. This represents an unemployment rate of approximately 1% among the total labor force of 2.96 million. Among Kuwaiti workers, there were 28,190 unemployed individuals, an increase of 2,100 from the end of 2022, resulting in a citizen unemployment rate of 5.75% among the total Kuwaiti labor force of 490 thousand. It's important to note that comparing unemployment rates in Kuwait with those in developed countries requires consideration of Kuwait's unique context, where unemployment often correlates with awaiting nominations from the Civil Service Commission, especially for Kuwaiti graduates seeking public sector positions.

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 182.85161.78160.40163.38166.48
GDP (Constant Prices, Annual % Change) 6.1-2.2-1.43.82.5
GDP per Capita (USD) 37,62532,63831,72431,68031,648
General Government Gross Debt (in % of GDP) 2.93.27.112.217.1
Inflation Rate (%) 4.03.63.22.72.4
Current Account (billions USD) 63.1353.0448.3044.3339.87
Current Account (in % of GDP) 34.532.830.127.124.0

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Kuwaiti Dinar (KWD) - Average Annual Exchange Rate For 1 GHS 0.080.070.070.060.05

Source: World Bank, 2015

 

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Latest Update: May 2024