Economic Overview

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Kuwait is a very rich country and has developed a welfare state for its nationals, who enjoy a very high per capita income. Kuwait's economic growth was negative at -0.6% in 2019 as lower oil output and weaker oil prices offset the steady expansion of the non-oil sector. Due to the COVID-19 pandemic, it plummeted to -8.9% in 2020 but came back to positive territory at 1.3% in 2021 before reaching over 8.7% in 2022. It was expected to slow down to 2.6% in 2023 and 2024, subject to the post-pandemic global economic recovery (IMF, January 2023). Government spending, employment and credit growth are expected to support economic activity in the short term; nonetheless, this will depend on stable oil prices and higher oil output.

Kuwait’s public finances were relatively healthy in 2020, with a debt-to-GDP ratio of 11.7% that year. Despite the international context created by the COVID-19 pandemic the ratios decrease to only 8.7% in 2021 and 7.1% in 2022. It is expected to remain low with 6.9% in 2023 and 6.5% in 2024. Government spending is also expected to increase in the coming years amid plans to boost credit, employment and wages. At the same time, tax collection remains low as the government has delayed the introduction of a VAT and an excise tax on tobacco and sugary drinks. The excise tax and the VAT are set to be introduced in 2023. Low fiscal revenues combined with reduced oil export earnings, due to falling global oil prices and OPEC oil production in the wake of the Covid-19 pandemic, haven't put pressure on the current account surplus: it went from 3.2% in 2020 to 16.3% in 2021 and 29.1% in 2022. The current account balance is estimated to decrease to 23% in 2023 and 19.8% in 2024 (IMF, January 2023). Inflation ticked up to 3.4% in 2021 from 2.1% a year earlier, and then 4.3% in 2022. It should stabilise at 2.4% in 2023 and 2024 (IMF, 2023). Kuwait's plans to introduce a new debt law continues to be delayed, with the Parliament expected to review the law proposal in the medium term. Contrary to most countries, Kuwait can’t borrow money on international markets, for lack of legislation. A lack of debt law means that the government has been unable to issue debt since October 2017 and had to resort to General Reserves Fund for financing purposes. The continued drawdown from the Fund also weighed on Kuwait Investment Authority's assets - manager of the said fund - despite mandatory transfers from the government to its Future Generations Fund.

Persian Gulf nations, among the world’s richest at the turn of the century, have lost ground as the oil price receded. Bahrain, Kuwait, Oman and Saudi Arabia are all dropping out of the global top 20 as living standards stagnate or decline. Most of the country's wealth is concentrated in the hands of local citizens, while the majority of workers (especially from Asia) live in poor conditions. Unemployment rate is almost non-existent.

The Kuwait Investment Authority’s assets will continue to act as a fiscal backstop. It is the world's oldest sovereign wealth fund. As of April 2022, it was the world's 3rd largest sovereign wealth fund with 738 billion USD in assets under management. As oil export earnings recover in the medium term, underpinned by improvements in global demand conditions, and as concerns over the pandemic wane, the current account balance will continue to expand. A downside risk to this is economic recovery in China, which constitutes 25 percent of Kuwait’s exports (World Bank, 2022).

Foreign Trade

Kuwait is highly dependent on foreign trade, which represented 98 % of the GDP in 2021, the latest World Bank data available. As the fourth largest OPEC oil producer, Kuwait's exports earnings mainly come from mineral fuels, oils and  distillation products (over 95% of total exports and accounting for almost 50% of the GDP). On the other hand, the country depends particularly on imports of food products, consumer goods and semi-finished products. Imports have increased quickly in recent years due to the country’s undertaking of large projects and a high private consumption demand, and for 2022 they were led by motor cars, radio-telephony transmission tools, medicines, electronics equipments, and jewellery.

Kuwait exports to a wide number of countries, the main ones being United Arab Emirates (1.3%), Saudi Arabia, China,  India and Iraq. Kuwait’s largest suppliers are China (18%), the UAE (11.9%), the United States (8%), and Japan with 5.8% (Trading Economics, 2023). Imports from other Gulf countries have increased since joining the GCC (Gulf Cooperation Council).

The county’s exports largely depend on its oil output and global oil prices. In 2021, export of goods increased from 40.11 billion USD in 2020 to 63.12 billion USD, while imports of goods increased from 27.73 billion USD in 2020 to 31.88 billion USD in 2021. This figure is low compared to 2013-14, when the country exported more than double this value. Kuwait has a structurally positive trade balance; however, the country is a net importer of services. In 2021, Kuwait's trade balance excluding services was USD 28.16 billion against USD 3.40 billion a year earlier. Kuwait has been recording trade surpluses since 1993 due to shipments of oil.

COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID19 pandemic evolution and the most up-to-date statistics on the COVID-19 disease in Kuwait, please visit the Kuwaiti government’s COVID-19 Updates webpage with the official data.

For the international outlook you can consult the latest situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures

To find out about the latest public health situation in Kuwait and the current sanitary measures in vigour, please consult the the Kuwaiti government’s COVID-19 Updates page, the website of the U.S. embassy in Kuwait’s COVID-19 Information page and the Wikipedia 2020 Coronavirus Pandemic in Kuwait page.

Travel restrictions

The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.
The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.

Import & export restrictions

For information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, follow the section dedicated to Kuwait on the International Trade Centre's COVID-19 Temporary Trade Measures webpage. There are export prohibitions for all foodstuffs, medicines, medical supplies and equipment, unless authorized by Ministry of Trade and Industry.

Economic recovery plan

There are no specific plans for a Kuwaiti government economic recovery scheme to address the impact of the COVID19 pandemic on the Kuwaiti economy so far. For future possible up-to-date information please visit the website of the Kuwait Ministry of Finance (Arabic only).

Support plan for businesses

For information on the local business support scheme established by the Kuwaiti government to help small and medium-sized companies to deal with the economic impacts of the COVID19 epidemic on their activity, refer the Central Bank of Kuwait’s document Controls of Finance Extended to Individuals, Small & Medium-Sized Enterprises (SMEs) and the Economic Entities Negatively-Affected by COVID-19.

For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters

There are no specific support plans for exporters in Kuwait so far. For future possible up-to-date information please visit the website of the Kuwaiti Ministry of Commerce and Industry (Arabic only).