Investor Presentaiton
Kuwait's Economy
الوطني
NBK
Recent Developments
Real GDP (% y/y)
Total
Non-oil
GDP
Growth
Real GDP is projected to decline 6% in 2020 due to sharply lower
oil production as Kuwait adheres to OPEC+ cuts. Growth could
rebound to 2.3% in 2021 as these cuts are partially reversed.
6
4.8
4.2
3.0
2.6
4
1.6
2.3
1.0
2
0.4
0.5
2.9
2.3
1.1
1.2
0
Non-oil growth is seen at -4.0 in 2020 on fallout from the Covid
pandemic, with the large government sector limiting the drop.
0.6
-4.7
-2
-4
-4.0
-6.0
The government is however looking to cut spending to address the
fiscal deficit. The draft budget for FY20/21 is under review and
outlays on capex are likely to be curtailed.
-6
2013
2014
2015
2016
2017
2018
2019f 2020f
2021f
Public
Finance
and
Inflation
Consumer
Sector
Currently at 1.9% (May), inflation will remain low at below 2%,
supporting real purchasing power. There is some downside risk
from potential softness in residential real estate rents.
Consumer spending took a major hit during the lockdown months,
but seems to be recovering rapidly. POS/ATM spending was down
only 3% y/y in June, with online spending up sharply.
The large number of nationals in stable public sector jobs should
support the spending outlook, as will loan payment deferrals.
Credit
Growth
Private credit growth has held up relatively well so far in 2020 at
4.5% y/y in May helped by (i) loan repayment deferrals and (ii)
rising loans to retail firms. The policy rate has been cut to 1.5%.
Deposit growth picked up to 2.7% y/y in May helped by stronger
private deposits; government deposits have been solid so far this
year, now up 3% y/y.
Private credit (change, %y/y)
10
Month end
8
6
4
2
0
May-16
May-17
200
May-18
T
-2
-4
64202 4 6
-6
10
12 month average
8
6
4
May-19
Real estate sales 12m average (KD mn)
Commercial
150
Residential
0
May-20
200
Investment
150
100
100
Real Estate
Activity
Property sales were at decent levels early on in the year, but will
have been hit by government and business shutdowns. The
residential sector could hold up well given solid demand base.
50
50
0
Feb-16
Feb-17
Feb-18
Feb-19
0
Feb-20
Sources: Central Bank of Kuwait, Central Statistical Bureau, Ministry of Finance, Refinitiv, NBK estimates
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