Kuwait’s real GDP grew by 5.7 per cent in 2011 and is projected to swell by nearly 4.5 per cent in 2012 due to higher oil output and prices. Nominal GDP is forecast to leap by nearly 29 per cent this year.
The surge in crude prices also boosted the fiscal surplus of the oil-rich emirate to nearly KD eight billion (Dh108 billion) in fiscal year 2010-2011 and the balance could surge to KD14.7 billion (Dh199 billion) in fiscal 2011-2012, which ends on March 31, the Kuwaiti-based Global Investment House (GIH) said.
“Since December 2010, Kuwait has increased its oil production to support the efforts to stabilize the global oil market. In real terms, for 2011, the IMF estimated the economy to grow by 5.7 per cent,” GIH said.
It noted that similar to most GCC countries, the hydrocarbon sector is a main contributor to Kuwait’s GDP as it represented an average of 54 per cent of nominal GDP in 2010 and an expected 58 per cent during 2011 Real non-oil GDP, despite recovering from the recession of 2009 remained weak, with IMF estimates showing it grew by 3.5 per cent in 2010.
“For 2011, IMF further estimated a growth of 5.5 per cent. However, the continued deleveraging in the financial sector, slow credit growth, and a seemingly slower implementation of the 2010-2014 development plan driven by domestic politics hindered growth which we believe remained relatively weak.”
The report showed Kuwait suffered from negative growth of 5.2 per cent in 2009 because of the 2008 global fiscal distress before its GDP rebounded into positive growth in the following years. It put real GDP at around $74 billion in 2011 and projected it to climb to nearly $77.3 billion in 2012.
Nominal GDP was estimated at $106.6 billion in 2011 and is forecast to reach a record high of around $176.6 billion this year.
The report showed higher oil prices boosted Kuwait’s GDP per capita from $34,686 in 2010 to $45,464 in 2011 and is projected to climb further to nearly $47,017 in 2012, the third highest in the Arab world after Qatar and the UAE.
The report said its forecast for a higher fiscal surplus this year is based on an increase in the country’s revenue to nearly KD27.2 billion (Dh365 billion) from around KD20.2 billion (Dh273 billion) in the previous fiscal year. It expected public spending to edge up slight to KD12.5 billion from KD12.2 billion.