The State of Kuwait
Federation of Euro-Asian Stock Exchanges
Economic Development
and Outlook
68
The economy lost steam in the fourth quarter of last year according to recent data, following upwardly revised growth in Q3. A notable slowdown in the energy sector, and a less marked slowdown in the non-energy sector, led the deceleration. Looking to Q1 2019, OPEC-agreed oil production cuts likely dealt a blow to the energy sector. Indeed, oil output averaged just over 2.7 mbpd in January and February, notably down from Q4’s average of close to 2.8 mbpd. However, the non-oil sector should have picked up some of the slack: Private credit growth was perky at the outset of the year, which, coupled with muted inflation, should have supported consumption.
Growth should accelerate this year, with non-oil activity supported by a healthy labor market and a large infrastructure push. However, the performance of the energy sector will be curtailed by oil output curbs. Volatile oil prices, ebbing global economic momentum and geopolitical tensions pose downside risks to the outlook. Focus Economics analysts expect growth of 2.4% in 2019, which is down 0.2 percentage points from last month’s forecast, and 2.8% in 2020.
Boursa Kuwait become a
full member of FEAS
on June 2018