| KUWAIT |
Economy:
Kuwait has a geographically small, but wealthy, relatively open economy with self-reported
crude oil reserves of about 102 billion barrels - about 9% of world reserves. Petroleum
accounts for nearly half of GDP, 95% of export revenues, and 95% of government income.
Kuwaiti officials have committed to increasing oil production to 4 million barrels per day by
2020. The rise in global oil prices throughout 2010 is reviving government consumption
and economic growth as Kuwait experiences a 20% increase in government budget
revenue. Kuwait has done little to diversify its economy, in part, because of this positive
fiscal situation, and, in part, due to the poor business climate and the acrimonious
relationship between the National Assembly and the executive branch, which has stymied
most movement on economic reforms. Nonetheless, the government in May 2010 passed
a privatization bill that allows the government to sell assets to private investors, and in
January passed an economic development plan that pledges to spend up to $130 billion in
five years to diversify the economy away from oil, attract more investment, and boost
private sector participation in the economy. Increasing government expenditures by so
large an amount during the planned time frame may be difficult to accomplish.
GDP (purchasing power parity):
$136.5 billion (2010 est.)
country comparison to the world: 60
$133.9 billion (2009 est.)
$141.2 billion (2008 est.)
note: data are in 2010 US dollars
GDP (official exchange rate):
$131.3 billion (2010 est.)
GDP - real growth rate:
2% (2010 est.)
country comparison to the world: 148
-5.2% (2009 est.)
5% (2008 est.)
GDP - per capita (PPP):
$48,900 (2010 est.)
country comparison to the world: 10
$49,700 (2009 est.)
$54,300 (2008 est.)
note: data are in 2010 US dollars
GDP - composition by sector:
agriculture: 0.3%
industry: 48.1%
services: 51.6% (2010 est.)
Exports - commodities:
oil and refined products, fertilizers
Exports - partners:
Japan 17.9%, South Korea 17.31%, India 12.43%, Taiwan 9.07%, US 7.9%, China 7.55%,
Singapore 5.48% (2009)
Imports - commodities:
food, construction materials, vehicles and parts, clothing
Imports - partners:
US 11.18%, China 9.07%, Germany 7.63%, Japan 7.14%, Saudi Arabia 6.24%, Italy 5%,
France 4.77%, India 4.09%, UK 4.02% (2009)
Summary extracted from IMF Report - Kuwait: 2011 Article IV Consultation
(August 2011)
Kuwait faced the global financial crisis from a position of strength. The government posted
large saving rates during the pre-crisis boom years, which allowed it to accumulate large
external buffers in the form of foreign assets and placed it in a relatively strong fiscal and
external position to address the impact of the crisis. In this context, the government
launched a four year development plan (DP) in early 2010—which emphasizes much
needed investment in health, education, and infrastructure—with the objective of
transforming Kuwait into a regional trade and financial center, while expanding the role of
the private sector in the economy. Kuwaiti nationals account for 1.1 million, just over
30 percent of the country’s 3.6 million population and are predominantly employed in the
public sector while the private sector is largely dependent on expatriate labor.
Activity in the non-oil sector has recovered. Real GDP growth in 2010 is estimated
at 3.3 percent, comprising oil growth of 3.2 percent and non-oil growth of 3.4 percent.
Activity has been driven mostly by government expenditure; credit growth was small with
lending growth of 3.3 percent to the productive sectors (industry, services, and trade)
partially offset by a reduction in credit to the real estate and financial sectors. Similar to
other countries in the region, the regional unrest has weighed down on equities prices,
which declined by over 8 percent in 2011 through May 25. At the same time, Kuwait
has increased its oil production (by 6 percent since December 2010) to assist in the effort
to stabilize the global market.
The fiscal stance has been expansionary. Government expenditure in FY2010/11—
excluding energy-related subsidies and recapitalization of social security—is estimated to
have increased by 21½ percent. Half of this growth was attributable to the recent Amiri
grant, which offset the under-implementation of the budget. 2 Higher international oil
prices bolstered revenue with oil export receipts increasing by 19 percent. In 2010, fiscal
and external surpluses are estimated at about 21 and 28 percent of GDP, respectively,
compared to 28 and 24 percent in 2009.
Headline inflation increased in 2010, primarily due to higher international food prices.
Average food inflation reached about 8.2 percent in 2010 (9.8 percent at end-April 2011),
compared to 3.4 percent in 2009, but its impact on Kuwaiti citizens has been mitigated by
the Amiri grant. Non-food inflation remains subdued at around 3.6 percent as of April
2011, reflecting moderate increases in rents.
The relationship between the government and parliament remains tense. After a short-
lived improvement in relations in 2010, tensions reignited in the latter part of the year
and pressures on the government led to its resignation in late March 2011—the sixth
cabinet resignation in the past five years. A new government was formed by the
reappointed prime minister but disputes on economic and political issues have persisted
and led to the resignation of the Deputy Prime Minister for Economic Affairs in mid-June.
Several members of parliament also have voiced their intention to go ahead with earlier
plans to question key ministers.
Banks’ profitability and capitalization have improved but the Investment Companies (ICs)
sector continued to post losses. Profits of local banks increased by 70 percent in 2010 and
capitalization strengthened further. ICs continued to struggle and posted losses on
average in 2010—although at a lower level than average losses in 2009— and the debt
restructuring of some ICs remains unresolved.
The performance of the nonfinancial corporate sector has improved in 2010,
notwithstanding the continued drag by the real estate sector. The corporate sector’s net
profits increased by 170 percent in 2010, but the real estate sector continued to post
losses at levels similar to those in 2009. 5 With the exception of the real estate sector, the
debt service capacity of the corporate sector improved significantly, and corporates’
financial positions were strengthened by higher cash cushions. On average, corporates’
leverage and resilience to interest rate and income shocks have improved, although these
improvements were not observed in the weaker corporates.
Click here to view full report
Banking
Banks are under the supervision of Kuwait Central Bank. The banking sector is
fundamentally sound. Kuwait has eleven local commercial banks, which include five
Islamic banks. The largest bank is the National Bank of Kuwait (NBK). Following an
amendment to the Banking Law of 1968, the National Assembly allowed foreign banks to
establish operations in Kuwait. Currently, ten foreign banks have branches in Kuwait.
Well-known financial conglomerates such as Citigroup, BNP-Paribas, and Hong Kong
Shanghai Bank (HSBC) operate in Kuwait. While foreign banks operate in Kuwait, they are
restricted to opening only one branch, offering only investment banking services, and are
prohibited from competing in the retail banking sector. Foreign banks are also subject to a
maximum credit concentration equivalent to less than half the limit of the largest local bank,
and are expressly prohibited from directing clients to borrow from external branches of
their bank or taking any other measures to facilitate such borrowing.
Two specialized government-owned banks provide medium and long-term financing.
The Industrial Bank of Kuwait offers financing for industrial and agricultural related
projects. The Credit and Savings Bank facilitates the purchase of single-family or multi-
family residential units.
Stock Exchange
Established after the 1982 stock market crash, the Kuwait Stock Exchange (KSE) is the
third largest bourse in the GCC (after Saudi Arabia and the UAE’s combined stock
markets), with a market capitalization of USD 128.3 billion as of December 31, 2010.
Currently, 203 Kuwaiti companies and 20 companies from other Arab countries are listed
on the KSE. In February 2010, the Kuwaiti Parliament passed legislation with overwhelming
support to establish the first ever Capital Markets Authority (CMA) to oversee the KSE's
operations and procedures. The CMA's Board of Directors was appointed in September,
and is currently creating the CMA’s bylaws, which are expected to be implemented in 2011.
Kuwait has a geographically small, but wealthy, relatively open economy with self-reported
crude oil reserves of about 102 billion barrels - about 9% of world reserves. Petroleum
accounts for nearly half of GDP, 95% of export revenues, and 95% of government income.
Kuwaiti officials have committed to increasing oil production to 4 million barrels per day by
2020. The rise in global oil prices throughout 2010 is reviving government consumption
and economic growth as Kuwait experiences a 20% increase in government budget
revenue. Kuwait has done little to diversify its economy, in part, because of this positive
fiscal situation, and, in part, due to the poor business climate and the acrimonious
relationship between the National Assembly and the executive branch, which has stymied
most movement on economic reforms. Nonetheless, the government in May 2010 passed
a privatization bill that allows the government to sell assets to private investors, and in
January passed an economic development plan that pledges to spend up to $130 billion in
five years to diversify the economy away from oil, attract more investment, and boost
private sector participation in the economy. Increasing government expenditures by so
large an amount during the planned time frame may be difficult to accomplish.
GDP (purchasing power parity):
$136.5 billion (2010 est.)
country comparison to the world: 60
$133.9 billion (2009 est.)
$141.2 billion (2008 est.)
note: data are in 2010 US dollars
GDP (official exchange rate):
$131.3 billion (2010 est.)
GDP - real growth rate:
2% (2010 est.)
country comparison to the world: 148
-5.2% (2009 est.)
5% (2008 est.)
GDP - per capita (PPP):
$48,900 (2010 est.)
country comparison to the world: 10
$49,700 (2009 est.)
$54,300 (2008 est.)
note: data are in 2010 US dollars
GDP - composition by sector:
agriculture: 0.3%
industry: 48.1%
services: 51.6% (2010 est.)
Exports - commodities:
oil and refined products, fertilizers
Exports - partners:
Japan 17.9%, South Korea 17.31%, India 12.43%, Taiwan 9.07%, US 7.9%, China 7.55%,
Singapore 5.48% (2009)
Imports - commodities:
food, construction materials, vehicles and parts, clothing
Imports - partners:
US 11.18%, China 9.07%, Germany 7.63%, Japan 7.14%, Saudi Arabia 6.24%, Italy 5%,
France 4.77%, India 4.09%, UK 4.02% (2009)
Summary extracted from IMF Report - Kuwait: 2011 Article IV Consultation
(August 2011)
Kuwait faced the global financial crisis from a position of strength. The government posted
large saving rates during the pre-crisis boom years, which allowed it to accumulate large
external buffers in the form of foreign assets and placed it in a relatively strong fiscal and
external position to address the impact of the crisis. In this context, the government
launched a four year development plan (DP) in early 2010—which emphasizes much
needed investment in health, education, and infrastructure—with the objective of
transforming Kuwait into a regional trade and financial center, while expanding the role of
the private sector in the economy. Kuwaiti nationals account for 1.1 million, just over
30 percent of the country’s 3.6 million population and are predominantly employed in the
public sector while the private sector is largely dependent on expatriate labor.
Activity in the non-oil sector has recovered. Real GDP growth in 2010 is estimated
at 3.3 percent, comprising oil growth of 3.2 percent and non-oil growth of 3.4 percent.
Activity has been driven mostly by government expenditure; credit growth was small with
lending growth of 3.3 percent to the productive sectors (industry, services, and trade)
partially offset by a reduction in credit to the real estate and financial sectors. Similar to
other countries in the region, the regional unrest has weighed down on equities prices,
which declined by over 8 percent in 2011 through May 25. At the same time, Kuwait
has increased its oil production (by 6 percent since December 2010) to assist in the effort
to stabilize the global market.
The fiscal stance has been expansionary. Government expenditure in FY2010/11—
excluding energy-related subsidies and recapitalization of social security—is estimated to
have increased by 21½ percent. Half of this growth was attributable to the recent Amiri
grant, which offset the under-implementation of the budget. 2 Higher international oil
prices bolstered revenue with oil export receipts increasing by 19 percent. In 2010, fiscal
and external surpluses are estimated at about 21 and 28 percent of GDP, respectively,
compared to 28 and 24 percent in 2009.
Headline inflation increased in 2010, primarily due to higher international food prices.
Average food inflation reached about 8.2 percent in 2010 (9.8 percent at end-April 2011),
compared to 3.4 percent in 2009, but its impact on Kuwaiti citizens has been mitigated by
the Amiri grant. Non-food inflation remains subdued at around 3.6 percent as of April
2011, reflecting moderate increases in rents.
The relationship between the government and parliament remains tense. After a short-
lived improvement in relations in 2010, tensions reignited in the latter part of the year
and pressures on the government led to its resignation in late March 2011—the sixth
cabinet resignation in the past five years. A new government was formed by the
reappointed prime minister but disputes on economic and political issues have persisted
and led to the resignation of the Deputy Prime Minister for Economic Affairs in mid-June.
Several members of parliament also have voiced their intention to go ahead with earlier
plans to question key ministers.
Banks’ profitability and capitalization have improved but the Investment Companies (ICs)
sector continued to post losses. Profits of local banks increased by 70 percent in 2010 and
capitalization strengthened further. ICs continued to struggle and posted losses on
average in 2010—although at a lower level than average losses in 2009— and the debt
restructuring of some ICs remains unresolved.
The performance of the nonfinancial corporate sector has improved in 2010,
notwithstanding the continued drag by the real estate sector. The corporate sector’s net
profits increased by 170 percent in 2010, but the real estate sector continued to post
losses at levels similar to those in 2009. 5 With the exception of the real estate sector, the
debt service capacity of the corporate sector improved significantly, and corporates’
financial positions were strengthened by higher cash cushions. On average, corporates’
leverage and resilience to interest rate and income shocks have improved, although these
improvements were not observed in the weaker corporates.
Click here to view full report
Banking
Banks are under the supervision of Kuwait Central Bank. The banking sector is
fundamentally sound. Kuwait has eleven local commercial banks, which include five
Islamic banks. The largest bank is the National Bank of Kuwait (NBK). Following an
amendment to the Banking Law of 1968, the National Assembly allowed foreign banks to
establish operations in Kuwait. Currently, ten foreign banks have branches in Kuwait.
Well-known financial conglomerates such as Citigroup, BNP-Paribas, and Hong Kong
Shanghai Bank (HSBC) operate in Kuwait. While foreign banks operate in Kuwait, they are
restricted to opening only one branch, offering only investment banking services, and are
prohibited from competing in the retail banking sector. Foreign banks are also subject to a
maximum credit concentration equivalent to less than half the limit of the largest local bank,
and are expressly prohibited from directing clients to borrow from external branches of
their bank or taking any other measures to facilitate such borrowing.
Two specialized government-owned banks provide medium and long-term financing.
The Industrial Bank of Kuwait offers financing for industrial and agricultural related
projects. The Credit and Savings Bank facilitates the purchase of single-family or multi-
family residential units.
Stock Exchange
Established after the 1982 stock market crash, the Kuwait Stock Exchange (KSE) is the
third largest bourse in the GCC (after Saudi Arabia and the UAE’s combined stock
markets), with a market capitalization of USD 128.3 billion as of December 31, 2010.
Currently, 203 Kuwaiti companies and 20 companies from other Arab countries are listed
on the KSE. In February 2010, the Kuwaiti Parliament passed legislation with overwhelming
support to establish the first ever Capital Markets Authority (CMA) to oversee the KSE's
operations and procedures. The CMA's Board of Directors was appointed in September,
and is currently creating the CMA’s bylaws, which are expected to be implemented in 2011.
Background:
Britain oversaw foreign relations and defense
for the ruling Kuwaiti AL-SABAH dynasty from
1899 until independence in 1961. Kuwait was
attacked and overrun by Iraq on 2 August
1990. Following several weeks of aerial
bombardment, a US-led, UN coalition began a
ground assault on 23 February 1991 that
liberated Kuwait in four days. Kuwait spent
more than $5 billion to repair oil infrastructure
damaged during 1990-91. The AL-SABAH
family has ruled since returning to power in
1991 and reestablished an elected legislature
that in recent years has become increasingly
assertive. The country witnessed the historic
election in May 2009 of four women to its
National Assembly. Amid the 2010-11 uprisings
and protests across the Arab world, stateless
Arabs, known as bidoon, staged small protests
in February and March 2011 demanding
citizenship, jobs, and other benefits available to
Kuwaiti nationals. Youth activist groups -
supported by opposition legislators and the
prime minister's rivals within the ruling family -
in March of 2011 rallied for an end to
corruption and the prime minister's ouster.
Government type:
constitutional emirate
Capital:
name: Kuwait
time difference: UTC+3
Independence:
19 June 1961 (from UK)National holiday:
National Day, 25 February (1950)
Constitution:
approved and promulgated 11 November 1962
Legal system:
civil law system with Islamic law significant in
personal matters; has not accepted compulsory
ICJ jurisdiction
Suffrage:
NA years of age; universal (adult); note - males
in the military or police are not allowed to vote;
adult females were allowed to vote as of 16
May 2005; all voters must have been citizens
for 20 years
Government:
Chief of state: Amir SABAH al-Ahmad al-Jabir
al-Sabah (since 29 January 2006); Crown
Prince NAWAF al-Ahmad al-Jabir al-Sabah
(born 25 June 1937)
head of government: Prime Minister JABIR
AL-MUBARAK al-Hamad al-Sabah (since 30
November 2011); First Deputy Prime Minister
AHMAD al-Hamud al-Jabir al-Sabah; Deputy
Prime Ministers AHMAD AL-KHALID al-Hamad
al-Sabah, SABAH AL-KHALID al-Hamad
al-Sabah, Mustafa al-Jassim al-SHAMALI
cabinet: Council of Ministers appointed by the
prime minister and approved by the amir; note -
the cabinet of Prime Minister NASIR
AL-MUHAMMAD al-Ahmad al-Sabah resigned
on 28 November 2011, but will continue in a
caretaker role without Health Minister Hilal
al-SAYER, Planning and Development Minister
Abdelwahab al-HAROUN, Minister of Justice
Muhammad Muhsin al-AFASI, and Minister of
State for Cabinet Affairs Ali al-RASHID
elections: none; the amir is hereditary; the amir
appoints the prime minister and deputy prime
ministers
For names of current Ministers, click here.
Disputes - international:
Kuwait and Saudi Arabia continue negotiating a
joint maritime boundary with Iran; no maritime
boundary exists with Iraq in the Persian Gulf
All the information on this page sourced from
the CIA World Factbook, the US Commercial
Service and relevant FATF M.E.R.
Britain oversaw foreign relations and defense
for the ruling Kuwaiti AL-SABAH dynasty from
1899 until independence in 1961. Kuwait was
attacked and overrun by Iraq on 2 August
1990. Following several weeks of aerial
bombardment, a US-led, UN coalition began a
ground assault on 23 February 1991 that
liberated Kuwait in four days. Kuwait spent
more than $5 billion to repair oil infrastructure
damaged during 1990-91. The AL-SABAH
family has ruled since returning to power in
1991 and reestablished an elected legislature
that in recent years has become increasingly
assertive. The country witnessed the historic
election in May 2009 of four women to its
National Assembly. Amid the 2010-11 uprisings
and protests across the Arab world, stateless
Arabs, known as bidoon, staged small protests
in February and March 2011 demanding
citizenship, jobs, and other benefits available to
Kuwaiti nationals. Youth activist groups -
supported by opposition legislators and the
prime minister's rivals within the ruling family -
in March of 2011 rallied for an end to
corruption and the prime minister's ouster.
Government type:
constitutional emirate
Capital:
name: Kuwait
time difference: UTC+3
Independence:
19 June 1961 (from UK)National holiday:
National Day, 25 February (1950)
Constitution:
approved and promulgated 11 November 1962
Legal system:
civil law system with Islamic law significant in
personal matters; has not accepted compulsory
ICJ jurisdiction
Suffrage:
NA years of age; universal (adult); note - males
in the military or police are not allowed to vote;
adult females were allowed to vote as of 16
May 2005; all voters must have been citizens
for 20 years
Government:
Chief of state: Amir SABAH al-Ahmad al-Jabir
al-Sabah (since 29 January 2006); Crown
Prince NAWAF al-Ahmad al-Jabir al-Sabah
(born 25 June 1937)
head of government: Prime Minister JABIR
AL-MUBARAK al-Hamad al-Sabah (since 30
November 2011); First Deputy Prime Minister
AHMAD al-Hamud al-Jabir al-Sabah; Deputy
Prime Ministers AHMAD AL-KHALID al-Hamad
al-Sabah, SABAH AL-KHALID al-Hamad
al-Sabah, Mustafa al-Jassim al-SHAMALI
cabinet: Council of Ministers appointed by the
prime minister and approved by the amir; note -
the cabinet of Prime Minister NASIR
AL-MUHAMMAD al-Ahmad al-Sabah resigned
on 28 November 2011, but will continue in a
caretaker role without Health Minister Hilal
al-SAYER, Planning and Development Minister
Abdelwahab al-HAROUN, Minister of Justice
Muhammad Muhsin al-AFASI, and Minister of
State for Cabinet Affairs Ali al-RASHID
elections: none; the amir is hereditary; the amir
appoints the prime minister and deputy prime
ministers
For names of current Ministers, click here.
Disputes - international:
Kuwait and Saudi Arabia continue negotiating a
joint maritime boundary with Iran; no maritime
boundary exists with Iraq in the Persian Gulf
All the information on this page sourced from
the CIA World Factbook, the US Commercial
Service and relevant FATF M.E.R.
| KnowYourCountry |
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| Last Updated: 2 April 2012 |