World Bank, IMF align on Kuwait’s economic growth
This growth trend is expected to continue, reaching around 2.2% in 2025. Regarding the current account balance, it is expected to decline to represent 22.7% of GDP in 2024, down from 29.3% in the previous year, and then continue to decline. To 21.9%. In 2025. It should be noted that the Kuwaiti public debt law expired in September 2017, and a new state debt law has not been approved since then, despite the introduction of a draft law allowing the issuance of sukuks. The World Bank expects faster growth for the economies of the oil-exporting Gulf countries in 2024, by about 2.8%, and a further increase to 4.7% in 2025. The report stresses the need to diversify economic and financial revenues due to transformations in global oil markets and the increasing demand for renewable energy sources.
For the Middle East and North Africa region, the World Bank expects GDP to rise to 2.7% in 2024, a slight improvement from 1.9% in 2023. Likewise, oil-importing and oil-exporting countries are expected to see more balanced growth rates. Compared to 2022, when higher oil prices favored growth in oil-exporting countries. Meanwhile, the International Monetary Fund revised its forecasts for the Kuwaiti economy for the current year, anticipating a 1.4% deficit in GDP for 2024, a significant improvement from the previous forecast of 3.6%. In addition, the International Monetary Fund expects Kuwait’s GDP to grow by 3.8% in 2025, reports Al-Qabas daily.
According to the International Monetary Fund’s forecast report for April 2024 entitled “The recovery of the global economy is steady but slow and varies by region,” Kuwait’s fiscal balance is expected to decline from 32.8% of GDP in 2023 to 30.1% in 2024 and then to 27.1%. %. % in 2025. Inflation rates in Kuwait are expected to reach 3.2% in 2024 and 2.7% in 2025, down from 3.6% in 2023. The International Monetary Fund also revised its forecasts for the Middle East and Central Asia, expecting a rise in Growth from 2% in 2023 to 2.8% in 2024 and then to 4.2% in 2025. This adjustment is due to a decrease in non-oil activity and oil revenues in some countries in the region. At the global level, the International Monetary Fund raised its economic growth forecast to 3.2% in 2024, driven by the strength of the US economy and some emerging markets. The bank maintained its growth forecast for 2025 at 3.2%, but warned of continued inflation and geopolitical risks.
Despite the upward revision to global economic growth, the International Monetary Fund warned of potential short-term challenges resulting from higher borrowing costs and reduced fiscal support in some countries. He stressed the need for decisive economic measures and highlighted the ongoing battle against inflation, especially in low-income countries facing pressure from a rising dollar and rising food and fuel costs. The IMF has identified several risks to global economic growth, including spillover effects from conflicts such as the Russia-Ukraine war and regional violence in the Middle East, which could fuel inflation and lead to expectations of higher interest rates, impacting global markets and economic sentiment. Furthermore, credit rating agency Standard & Poor’s highlighted the growing geopolitical risks in the Middle East, particularly the ongoing tensions in Gaza and Iranian pressure on Israel.
The agency warned that a major regional conflict could destabilize the region’s economic, social and financial stability, which could lead to negative credit rating measures and significant economic repercussions for affected countries. Standard & Poor’s stressed that the sovereign ratings of Middle Eastern countries are sensitive to regional geopolitical fluctuations, with the possibility of long-term conflicts that negatively affect economic growth and government financial and financial flows. However, countries such as Abu Dhabi, Kuwait, Qatar and Saudi Arabia are expected to mitigate these pressures in the near term through their significant financial reserves and international investments.
