Kuwait's Non-Oil Sector Sluggish, but Oil GDP Expected to Rise: NBK Report

Kuwait, 10 July, 2024 :   Kuwait's non-oil sector GDP growth weakened in Q4 last year, with declines in manufacturing and services. However, oil GDP is expected to rise, supported by stable oil prices, according to a report by the National Bank of Kuwait (NBK).

Non-oil indicators in Q2 2024 showed mixed results, indicating a sluggish economy. Recent GDP figures for 2023 reveal subpar performance. Despite this, improvements in consumer spending, business credit, real estate, and project activity provide some optimism. PMI readings have remained in expansion territory, with business confidence at historically high levels, stated NBK in its Kuwait Quarterly Economic Brief.

Economic growth prospects improved in early June with the announcement that Opec+ would begin unwinding voluntary crude oil production cuts from October 2024. This is expected to boost Kuwait's oil GDP and exports. Oil prices remained stable, closing Q2 2024 slightly higher, supported by ongoing Opec+ supply cuts and regional geopolitical risks. Kuwait Export Crude ended June at $87.9/bbl, up 1.9% q/q and 10.5% ytd.

Non-oil private sector activity slowed in Q2, with the June PMI reading at 51.6, down from March’s post-pandemic high of 53.2. June marked the 17th month of expansion for local firms, driven by gains in output, new orders, and employment. Rising input costs led businesses to increase selling prices to maintain profit margins, while business optimism for the year ahead remained strong.

Preliminary GDP figures for Q4 2023 from the Central Statistical Bureau showed a quarter-on-quarter improvement of 11.2%, but a year-on-year contraction of 2.3%, extending the decline to five consecutive quarters.

Source : www.zawya.com