Kuwait's Economic Outlook: World Bank Revises GDP Forecast Upwards

Kuwait, 6 May, 2024 : The World Bank has revised Kuwait's 2024 economic growth projection upwards to 2.8% year-on-year (y/y), citing expectations of OPEC+ production cuts phasing out. This adjustment, reported by Kuwait Financial Centre (Markaz), surpasses the previous forecast of 2.6% y/y made in January 2024.

Conversely, the IMF anticipates a 1.4% contraction in Kuwait's real GDP for 2024, assuming continued oil production cuts throughout the year, marking Kuwait as the lone GCC economy expected to contract, according to Markaz's April market review report.

In March, Kuwait's Consumer Price Index (CPI) increased by 3.02%, driven by a 5.71% rise in the food and beverage segment. Project spending in 2023-24 reached KD345 million ($1.1 billion), a third of the planned capital expenditure of KD1.1 billion ($3.56 billion).

Despite subdued project activity in Q1 2024, with project awards totaling $327 million, down from $1.8 billion in Q1 2023, the project market is expected to gain momentum as contractors prepare for significant upcoming projects.

Real estate sales in Kuwait declined by 2.3% y/y in Q1 2024, with residential and investment segments seeing declines of 2.8% and 3.9%, respectively, amidst a high-interest rate environment.

Markaz notes Kuwait's equity market decline in April due to geopolitical tensions, though positive Q1 earnings mitigated the downturn, with the Boursa Kuwait All Share (PR) index falling by 3.8% amid broad-based declines.

Amid global market declines due to US inflation concerns, the IMF has lowered the GCC's 2024 real GDP growth forecast to 2.4%, citing production cuts, geopolitical tensions, and Red Sea shipping disruptions. Growth is expected to rebound to 4.9% in 2025 on strong non-oil economic activity and increased hydrocarbon production.

Saudi Arabia's non-oil sector revenue hit a record USD 453 billion in 2023, while administrative delays and supply constraints in the UAE due to the Red Sea shipping crisis have been reported.

Source : www.zawya.com