Economic Analysis - Growth Will Disappoint In 2017 - SEPT 2017
BMI View: Oil production cuts and weak confidence will keep Kuwaiti real GDP growth low in 2017. Growth will rebound in 2018 on the back of higher crude output and ongoing government investment.
Kuwait's growth will disappoint in 2017 due to a weaker-than-expected oil sector. In addition to production cuts agreed by OPEC [Organisation of Petroleum Exporting Countries] and non-OPEC oil-producing states, global oil prices have remained relatively low, weighing on non-oil activity. We forecast real GDP growth of just 0.3% this year, a significant downgrade on our previous projection of a 2.8% expansion and slower than the 1.9% we estimate in 2016. With the oil sector underperforming, we expect that government investment will provide the bulk of the growth this year. In 2018 we forecast real GDP growth of 3.0% as oil production picks up again and prices tick higher, boosting confidence.
Oil Cuts Responsible For Growth Slump
|Growth Will Bottom In 2017|
|Kuwait - Real GDP Growth And Nominal GDP Levels|
|e/f = BMI estimate/forecast. Source: Central Bank of Kuwait, BMI|