Total financing provided by banks to Kuwait’s construction sector witnessed a significant increase of $400 million year-on-year in April, revealed the latest monthly statistics from the Central Bank of Kuwait. However, local bank financing to the sector saw a 54.4 percent monthly decline to KWD137.4 million in April from KWD301.7 million in March.
Financing for the construction sector saw a 2.4 percent annual increase to KWD135 million in April 2023. During the first four months of that year, total financing to the sector amounted to around KWD971.1 million.
The accumulated balance of local banks’ construction financing saw a marginal 0.07 percent increase to KWD2.822 billion from KWD2.820 billion in March. Year-on-year, however, the balance saw a 16.5 percent surge, equivalent to a KWD400 million increase.
Construction sector set for growth
A recent report from GlobalData reveals that Kuwait’s construction market size reached $17.2 billion in 2023. The sector is expected to grow by 3 percent annually from 2025 to 2028. GlobalData attributes this growth to the rise of investments in renewable energy, transport, electricity, housing and sports facilities in line with the New Kuwait 2035 National Development Plan. The report also reveals that the key sectors in the Kuwait construction market include commercial construction, industrial construction, infrastructure construction, energy and utilities construction, institutional construction, and residential construction.
In addition, Mordor Intelligence expects the country’s construction sector to grow to $13.94 billion in 2024 and $18.59 billion by 2029.
Kuwait has witnessed a construction surge due to its tax reforms, which have encouraged foreign investors to invest in the country. In line with its diversification plan’s, the government has also implemented multiple programs to develop the transportation and renewable energy infrastructure across the country, further supporting the country’s construction sector.
Mordor Intelligence reveals that Kuwait has authorized over $60 billion for infrastructure, health, environment and energy projects. The projects include four partnership projects valued at nearly $3.2 billion and 14 significant public projects with a combined value of almost $59 billion.
For more news on banking & finance, click here.
