IMF sees Kuwait’s GDP growth above 8% for 2022

The IMF has projected above 8 per cent actual GDP progress for Kuwait this yr earlier than moderating in 2023.

General, actual GDP progress is estimated to have rebounded from -8.9 per cent in 2020 to 1.3 per cent in 2021, the event financial institution’s employees mission stated in an announcement.

The rise in GDP progress in 2022 is supported by elevated oil manufacturing, excessive oil costs, and sustained enchancment in home demand.

“In 2023, progress is more likely to average, reflecting slowing exterior demand and oil manufacturing cuts below the OPEC+ settlement,” the IMF assertion talked about.

The assertion additionally talked about that direct adversarial spillovers from the Russia-Ukraine disaster have been contained to this point given the restricted commerce and monetary linkages with each international locations.

For the reason that disaster started, the Center East’s oil producers have benefitted from the upper oil costs, with IMF itself estimating earlier this yr that they might reap a windfall of as much as $1.3tn over the following 4 years.

For Kuwait, which produces round 2.6 million barrels of crude per day, the upper oil costs and output have led to increased total fiscal and present account surpluses this yr.

IMF stated inflation has been contained, benefiting from financial tightening and restricted pass-through from increased world meals and vitality costs supported by administered costs and subsidies.

The Kuwaiti banking system continues “to be well-capitalised and liquid, monetary soundness indicators are wholesome, and personal sector credit score progress stays sturdy”, in keeping with IMF.

Nonetheless, the financial institution warned the outlook is topic to uncertainties and dangers surrounding the exterior setting, together with potential impacts of financial coverage tightening in main superior economies and additional slowdown in world financial exercise.

Delays in key fiscal and structural reforms, the IMF stated, might “amplify the chance of procyclical fiscal insurance policies, and hinder progress towards extra financial diversification and better competitiveness”.