Kuwait’s economy to grow by 2.6% in 2025 – IMF

Kuwait’s economy is set to expand by 2.6 per cent in 2025, supported by higher oil output following the easing of OPEC+ production cuts and stronger non-oil growth of 2.7 per cent, according to the International Monetary Fund (IMF).

In its end-of-mission statement after a staff visit to Kuwait between September 15 and 22, the IMF said inflation is expected to moderate to 2.2 per cent this year, down from 2.9 per cent in 2024, while credit to the private sector is projected to rise to 6.1 per cent.

“The economy is recovering amid higher oil production and robust non-oil growth. Real GDP contracted by 2.6 percent in 2024, driven by a 6.9 percent fall in oil sector output due to OPEC+ production cuts, despite 1.8 percent non-oil growth supported by resilient private domestic demand.” IMF said.

The Fund noted that lower oil prices are weighing on Kuwait’s fiscal and external balances, with the central government’s fiscal deficit projected to widen to 7.8 per cent of GDP in the 2025/26 fiscal year, compared with 2.2 per cent a year earlier. The current account surplus is also seen narrowing to 26.5 per cent of GDP in 2025 from 29.1 per cent in 2024.

The IMF highlighted progress on fiscal and structural reforms, including the extension of the 15 per cent corporate income tax to large multinationals and the enactment of a new Public Debt Law in March 2025. It stressed that accelerating reforms remains crucial to diversify the economy, boost competitiveness, and support non-oil growth.

Attribution: Amwal Al Ghad English

Subediting: Y.Yasser