Qatar  | عربي

Doha, 4 June- QNB Group has published its Kuwait Economic Insight 2018 report. The report examines recent developments and the outlook for the Kuwait economy.

In 2018, we expect growth to recover to 1.4% as the non-hydrocarbon sector benefits from higher oil prices, stronger fiscal spending on the back of an expansionary budget and higher project spending. Hydrocarbon growth will remain flat due to the continuation of the OPEC agreement.

In 2019, growth should accelerate further to 4.3% as hydrocarbon production is boosted to pre-OPEC levels. Non-hydrocarbon growth will likely slow slightly on a smaller fiscal expansion and softer oil prices.

Government capital expenditure and project spending will be focused on the completion of projects related to Kuwait’s medium-long term vision. These include expanding the country’s crude and refining capacity, major road infrastructure projects, as well as strategic projects relating to Kuwait’s logistics, healthcare and housing sectors.

We expect oil prices to average USD69/b in 2018 and the oil market to balance as increased supply from non-OPEC producers is met with increased global demand. In 2019, we expect oil prices to dip to USD66/b as global demand growth slows, the OPEC agreement is lifted and further productivity gains are made by shale oil producers.





The fiscal surplus should widen to 5.9% as revenue grows faster than spending, thanks to higher oil prices. The government’s announced 2018/19 budget sees higher spending on wages and subsidies as well as higher capital expenditure. In 2019, the surplus should narrow only slightly to 5.6% as higher capital spending more than offsets the increase in revenue to GDP. Non-hydrocarbon revenue should see a boost with the implementation of VAT.







In the banking sector we expect deposit growth to improve on the back of a wider fiscal surplus while loan growth should benefit from higher project spending and the government’s expansionary capital expenditure plans. Kuwait’s positive operating environment and improved growth outlook should keep banks’ profitability and capital adequacy ratios at healthy levels.


* Other recent QNB Economic Insight reports include Qatar, Turkey, Indonesia, Singapore, Jordan, China, India and Vietnam are available on the QNB Group website. QNB Group operates in more than 31 countries across 3 continents and its economic reports leverage its knowledge of these markets to provide added value for its clients and counterparties.

Disclaimer and Copyright Notice: QNB Group accepts no liability whatsoever for any direct or indirect losses arising from use of this report. Where an opinion is expressed, unless otherwise provided, it is that of the analyst or author only. Any investment decision should depend on the individual circumstances of the investor and be based on specifically engaged investment advice. The report is distributed on a complimentary basis. It may not be reproduced in whole or in part without permission from QNB Group.


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