The International Monetary Fund, IMF, Executive Board has announced that it concluded the 2019 Article IV consultation with Kuwait.
Proceedings saw discussions on the Financial System Stability Assessment, FSSA, of Kuwait and concluded on 25th March.
According to the IMF, growth has resumed in Kuwait, and the current account rebounded thanks to higher oil prices. Executive Directors noted that growth is expected to strengthen and the underlying fiscal position to gradually improve over the medium term.
Kuwait’s hydrocarbon output rose by 1.2 percent in 2018 after contracting a year earlier. Buoyed by a rebound in confidence and government spending, non-oil growth has also accelerated to 2.5 percent.
Given the volatility of oil prices and the exhaustible nature of oil resources, Directors underscored the need for timely and well-sequenced fiscal and structural reforms to reduce Kuwait’s dependence on oil, boost government saving, and create more private sector jobs.
After the first deficit in more than two decades in 2016, the current account shifted back into surplus in 2017 and reached an estimated surplus of 12.7 percent of GDP in 2018, the IMF findings indicated.
Inflation fell to a multiyear low of 0.7 percent due to falling housing rents, easing food prices, and a strengthening dinar, it said, adding, “while the overall fiscal balance has improved, financing needs remain large.”