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After Gross Domestic Product (GDP) grew by a healthy 6.1 percent in real terms last year, thanks to continued strong oil income, it is forecast to drop to 3.2 percent in 2013 and to 2.5 percent in 2014, NBK said. Following a massive contraction of around 8.0 percent in 2009 due to the impact of the global financial crisis, Kuwait’s economy gradually rebounded to grow by around 8.0 percent in 2011 as oil output and price remained high. Oil income in the OPEC member contributes an average of 95 percent to public revenues.
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Kuwait ended the past 13 fiscal years in the black and is forecast to post a huge budget surplus in the current fiscal year which ends on March 31. Oil GDP, which grew by 15 percent and 10 percent in 2011 and 2012 respectively, is expected to remain flat this year and contract by around 1.5 percent in 2014, according to the NBK report. But the bank revised upward expected non-oil GDP growth from 4.0 percent to 5.0 percent this year based on signs of greater determination by the authorities to implement large infrastructure projects. Most projects under a $110-billion four-year development plan, that runs until 2014, have been stalled because of a political crisis in the emirate.
This country, it baffles me!
ReplyDeleteThey've had so much time to diversify their economy and build at least one other sustainable industry. But still Kuwait remains almost completely dependent on oil. The private sector is anemic. SME investment is scarce. Whats more, all the local wealth is invested outside Kuwait, because... THERE IS NOTHING TO INVEST IN! it's crazy! where is the leadership??
Kuwait is in a serious crisis of sustainability, they need to begin diversifying now. Before all the lucrative industries are taken.
VCs are popping out of all corners here and I assume in the UAE in order to capitalize on SMEs/start ups. I guess they are beginning to realize this, biggest problem the whole GCC is facing is how to get young nationals to accept a career in the private sector as opposed to the extremely lucrative ones in the public sector (high pay, less work. If the young generation is not optimistic/reluctant to enhance the private sector they are in deep trouble.
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