(MENAFN) According to the International Monetary Fund (IMF), Kuwait's non-oil growth is projected to rise to approximately 3.8 percent in 2023, thanks to the robust expatriate community in the country. Although overall growth is expected to be modest at 0.1 percent this year, the non-oil economy is poised for strengthening due to financial stimulus measures and a partial recovery in expatriate employment, as stated in the IMF's latest analysis of Kuwait.
Despite slow growth in real credit, the report highlights that Kuwait's economic recovery remains on track, benefiting from high oil production and prices. The country has shown resilience in recovering from the effects of the pandemic, and inflation has been kept under control, with limited spillover from higher global food and energy prices. This achievement can be attributed to managed prices, subsidies, and the implementation of prudent monetary policies in line with major central banks.
Kuwait's fiscal balance has improved significantly, with the overall fiscal surplus expected to reach 22.5 percent of the gross domestic product (GDP) in 2022, compared to 6.4 percent in 2021. Furthermore, the country's external balance has also strengthened, with the current account surplus estimated to have increased to 33 percent of the GDP in 2022, up from 26.6 percent in 2021.
In addition to fiscal and external stability, Kuwait has successfully maintained financial stability within its banking sector. The sector has maintained an efficient level of capital and liquidity, ensuring the soundness of the country's financial system.
The positive outlook for Kuwait's non-oil economy underscores the country's ability to navigate challenges and capitalize on its expatriate community's contributions. With continued fiscal discipline, prudent monetary policies, and a focus on financial stability, Kuwait is well-positioned to sustain its economic recovery and drive growth in the coming years.
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