Economic Overview

Kuwait is a very rich country and has developed a welfare state for its nationals, who enjoy a very high per capita income. After growing 8.9% in 2022 amid high hydrocarbon prices, Kuwait experienced negative economic growth in 2023 (-0.6%) primarily attributed to reduced oil prices and OPEC+ production cuts, estimated at 4%. Oil, which constitutes nearly 50% of GDP, significantly impacted the economy. GDP growth is anticipated to rebound to 3.6% in 2024, driven by increased exports of crude oil and refined fuel, facilitated by the expanded refining capacity provided by the Al-Zour refinery (the total refining capacity is projected to rise to 1.4 million barrels per day in 2024, compared to an estimated 1.05 million in 2023, according to Coface). For 2025, the IMF forecasts growth at 4.1%.

Concerning public finances, the Ministry of Finance's draft budget anticipates a 13.5% reduction in Kuwait's budget deficit for the 2024-25 fiscal year. The expected deficit is set to reach KWD 5.89 billion (USD 19.15 billion), with total revenues estimated at KWD 18.6 billion, marking a 4.1% decrease from the previous fiscal year. Oil revenues are forecasted to amount to KWD 16.23 billion, down 5.4% from 2023-2024, based on an assumed oil price of USD 70 per barrel. Expenditure is projected to decrease by 6.6% to KWD 24.55 billion, with salaries and subsidies accounting for 79.4% of total expenses, while capital expenditure is expected to represent 9.3% of the total budget. Kuwait's fiscal and external balance sheets retain their position among the strongest globally. Fitch Ratings predicts that Kuwait's sovereign net foreign asset position will average 505% of GDP in 2023-24. The majority of these assets are held in the Future Generation Fund (FGF), overseen by the Kuwait Investment Authority (KIA), which also manages the assets of the General Reserve Fund (GRF), the government's treasury account. Gross government debt to GDP is currently low, standing at 8.7% of estimated GDP for the fiscal year ending March 2023. However, should a debt law be enacted in FY24 alongside limited fiscal reform and lower oil prices, Fitch Ratings predicts that government debt will more than double to 24% of GDP in FY25 and continue to rise in subsequent years due to projected fiscal deficits. According to the IMF, inflation was estimated at 3.4% in 2023 and should gradually decline to 3.1% this year and 2.8% in 2025, supporting private consumption.

The latest data from the Public Authority for Civil Information show that, as of June 2023, Kuwait faces unemployment challenges, with 31,831 individuals, both Kuwaiti and non-Kuwaiti, jobless. This represents an unemployment rate of approximately 1% among the total labor force of 2.96 million. Among Kuwaiti workers, there were 28,190 unemployed individuals, an increase of 2,100 from the end of 2022, resulting in a citizen unemployment rate of 5.75% among the total Kuwaiti labor force of 490 thousand. It's important to note that comparing unemployment rates in Kuwait with those in developed countries requires consideration of Kuwait's unique context, where unemployment often correlates with awaiting nominations from the Civil Service Commission, especially for Kuwaiti graduates seeking public sector positions.

Foreign Trade

Kuwait is highly dependent on foreign trade, which represented 98% of its GDP (World Bank, latest data available). As the fourth-largest OPEC oil producer, Kuwait's export earnings mainly come from mineral fuels, oils, and distillation products, which account for over 95% of total exports and almost 50% of the GDP. On the other hand, the country relies particularly on imports of food products, consumer goods, and semi-finished products. Imports have increased rapidly in recent years due to the country's undertaking of large projects and high private consumption demand. For 2022, imports were led by motor cars, radio-telephony transmission tools, gold, medicaments, and iron or steel tubes (data Comtrade).

Kuwait exports to a wide number of countries, with the main ones being the United Arab Emirates, India, Saudi Arabia, China, and Pakistan. Kuwait's largest suppliers are China (18.8%), the UAE (11.9%), the United States (8.6%), India (5.5%), and Saudi Arabia (5.3% - data Comtrade). Kuwait permits duty-free entry of GCC goods that adhere to origin criteria. To qualify for preferential duty status, each product must demonstrate that at least 40% of its value added originates from a GCC member country, with the producing firm's capital ownership by GCC citizens reaching 51%. In April 2018, Kuwait endorsed the World Trade Organization Trade Facilitation Agreement, aimed at streamlining customs and border procedures, enhancing transparency and information accessibility, and reducing trade expenses.

The country's exports largely depend on its oil output and global oil prices, and Kuwait has been recording trade surpluses since 1993. In 2022, the export of goods increased to a record-high USD 101.2 billion (+60.4% y-o-y) amid high hydrocarbon prices, while imports stood at USD 32.3 billion (+1.4%). Kuwait has a structurally positive trade balance; however, the country is a net importer of services, with USD 10.6 billion in exports against USD 26.5 billion in imports in 2022.

COVID-19 Country Response

Travel restrictions

Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.

Import & export restrictions

A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

For the general overview of the key economic policy responses to the COVID-19 pandemic (fiscal, monetary and macroeconomic) undertaken by the government of Koweit, please consult the country's dedicated section in the IMF’s Policy Tracker platform.

Support plan for businesses

For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.