Investor Presentaiton
Kuwait's Economy
GDP Growth
Recent Developments
GDP declined by 8.9% in 2020 due to sharply lower oil production as Kuwait
adhered to OPEC+ cuts and reduced non-oil activity resulting from the
coronavirus pandemic. Headline growth could rebound to 1.0% in 2021 as
these cuts are partially reversed.
Non-oil GDP contracted by 8.8% in 2020 after mobility restrictions were
imposed to contain the pandemic. Growth could rebound by 3.2% in 2021 as
private consumption recovers and refining activity ramps up.
Public
Finance and
Inflation
After cutting spending in FY20/21 to address the fiscal deficit, the FY21/22
budget outlined a 7% rise in outlays, including a targeted 20% rise in capex. If
implemented, this would help spur the recovery in economic growth.
Inflation accelerated to 2.1% in 2020, mainly on higher food prices, and is
expected to average 2.6% in 2021; there is some downside risk from potential
softness in residential real estate rents.
Consumer
Sector
Credit Growth
"
Real Estate
Activity
Consumer spending took a major hit during the lockdown months, but has
bounced back appreciably. Total spending (POS/ATM) was up 22.8% y/y in
September 2021. Loan payment deferrals, the number of nationals in stable
public sector jobs and reduced overseas travel have supported spending.
Private credit growth was up 3.8% y/y at end-August, driven by strong
household borrowing. Business credit has been slower to take off, but should
benefit from the economy returning to a more normal footing. The policy
interest rate is at 1.5%.
Private and government deposit growth (-2.3% y/y and -2.6% y/y, respectively)
was still negative in August; the reinstatement of loan repayment deferrals has
been positive, as are higher oil prices, which have boosted government
liquidity.
Property sales have returned to pre-Covid levels, having been hard-hit in 2020.
Recent strength is mostly from the residential sector which could hold up well
given the solid demand base and potentially get a further boost if the mortgage
law is approved.
Sources: Central Bank of Kuwait, Central Statistical Bureau, Ministry of Finance, Refinitiv, NBK estimates
Real GDP (% y/y)
Total
Non-oil
10
10
5.7
3.8
3.2
5
3.1.
2.4
2.5
5
1.5
1.1
0.5
-0.1
0.6°
0
0
2.4
1.0
2.9
-0.6
-5
-5
-8.8
-4.7
-10
-8.9
-10
2013
2014
2015
2016
2017
2018
2019
2020
2021f
Private credit (change, % y/y)
10
Month end
8
6
4
12 month average
10
10
8
6
4
2
2
0
Aug-18
Aug-19
Aug-20
0
Aug-21
Real estate sales 12m average (KD mn)
250
Commercial
200
150
100
50
50
Residential
250
Investment
200
150
100
50
0
Sep-17
Sep-18
Sep-19
Sep-20
0
Sep-21
National Bank of Kuwait 17View entire presentation