Kuwait’s Credit Growth Struggles Amid Sector Challenges, Household Lending Remains Strong

Kuwait, 3 September, 2024 : In July, Kuwait's domestic credit growth was impacted by a 10% drop in lending to banks and financial institutions, resulting in a year-to-date increase of just 1.8%, according to NBK-Economic Research. However, household credit displayed resilience, rising 0.5% month-over-month and 1.4% year-to-date, marking a solid recovery over recent months.

Business credit saw a modest 0.1% monthly increase, hampered by a 9.1% year-to-date decline in the oil and gas sector. Excluding this sector, business credit growth would have reached 3.3% year-to-date. Resident deposits rose in July, driven by public and government deposits, pushing year-to-date growth to 1.6%.

The PMI for Kuwait's private sector slipped to 49.7 in August, indicating the first contraction in thirteen months. The slowdown in metrics like output, new orders, and employment reflects a seasonal dip, though input prices rose due to higher costs for certain goods.

In Egypt, the PMI rose above 50 for the first time since November 2020, driven by demand recovery. Private credit in Egypt increased by 28% year-on-year in July, with strong growth in business and household credit.

In Saudi Arabia, non-oil business activity strengthened in August, with the PMI rising to 54.8. Business confidence improved despite increased competition and falling selling prices. 

In Qatar, non-hydrocarbon GDP growth slowed to 1.2% in 2023 due to base effects from the FIFA World Cup, with non-oil expansion easing to 1.1%. However, sectors like accommodation and food services saw significant growth. The growth outlook is expected to improve with expansions in LNG production capacity.

Source : www.zawya.com