Kuwait’s economy is estimated to have grown nearly 8 percent in 2022 thanks to high oil prices and it’s likely to bank a $23 billion surplus in the current fiscal year ending in March, according to economists at Kuwaiti consultancy Al Shall.
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Kuwait is home to one of the biggest wealth funds in the world, is one of the least indebted nations, and its historically strong banking system has plenty of liquidity.
While other Gulf states have spent billions of dollars developing non-oil economies and passing legislation to attract foreign investment, Kuwait has focused on protectionist measures.
According to Al-Shall, Kuwait’s fiscal deficit in 2022 narrowed to 3 billion Kuwaiti dinars ($9.8 billion) in the year through March, a drop of more than 72 percent on the previous year as oil prices recovered.
The OPEC member recorded the highest non-oil revenue in seven years, up 38.5 percent to 2.4 billion dinars, according to a report released last month by the Ministry of Finance. Oil revenue surged 84.5 percent to 16.2 billion dinars.
In addition, Al-Shall indicated that the total income for the year through March rose 76.9 percent to 18.6 billion dinars, while spending was 21.6 billion dinars.
Salaries and subsidies in the 2021-22 fiscal year accounted for 76 percent of spending, at 16.4 billion dinars.
Last month, the IMF projected above 8 percent real GDP growth for Kuwait this year before moderating in 2023.
Overall, real GDP growth is estimated to have rebounded from -8.9 percent in 2020 to 1.3 percent in 2021, the development bank’s staff mission said in a statement.
The rise in GDP growth in 2022 is supported by increased oil production, high oil prices, and sustained improvement in domestic demand.