Kuwait Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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Kuwait Country Risk Report
Product Price
$1,195.00

Core Views

  • We expect the Kuwaiti economy to see modest growth over 2016 and 2017, forecasting real GDP growth of 1.5% and 1.2%, respectively, from -1.6% in 2015. After a long period of stagnation, the Kuwaiti investment outlook appears to be improving, while the prospects for consumption remain bright. However, we again highlight Kuwait's ever-volatile political situation as the key downside risk to economic activity.

  • Kuwait has seen a flurry of populist legislation recently, including several measures specifically targeting expatriate workers. This runs the risk of increasing uncertainty within the private sector, as well as cementing perceptions of the country as a hub of policy instability.

  • We expect tensions to remain between the government and the legislative branch, even with the election of a renewed 'loyalist' parliament.

  • We forecast average consumer price inflation for Kuwait of 4.0% and 3.5% for 2016 and 2017 respectively, up from 3.0% in 2015. While we expect a slight fall in Kuwaiti food inflation over the near term on the back of lower global prices, a tight supply picture in the real estate market will fuel housing inflation over the coming quarters, in a trend seen across the GCC.

Key Risks

  • As ever, given the economy's heavy dependence on oil, any further downturn in global energy prices would prove disastrous. That said, Kuwait has the financial arsenal to cope with any short-term volatility in oil prices, and therefore the underlying risks in this regard are minimal.

  • Our forecasts assume that the implementation of the government's development plans will be slow owing to the impact of bureaucratic gridlock. However, the state certainly has the firepower to move forward with its capital spending plans if political compromises can be reached. Furthermore, a renewed loyalist parliament, following legislative elections in July 2013, offers the prospect of an acceleration of long-delayed economic reforms and infrastructure projects. Any improvement on this front would pose upside risks to our growth forecasts, as well as downside risks to our budget surplus projections.

Macroeconomic Forecasts (Kuwait 2014-2017)
Indicator 2014 2015e 2016f 2017f
National Sources/BMI
Real GDP growth, % y-o-y -1.2 1.6 1.2 1.9
Nominal GDP, USDbn 163.5 122.0 113.9 122.8
Consumer price inflation, % y-o-y, eop 3.0 3.0 4.0 3.5
Exchange rate KWD/USD, eop 0.29 0.30 0.31 0.31
Budget balance, % of GDP 27.7 7.6 -8.1 -5.9
Current account balance, % of GDP 32.5 8.9 -0.8 3.2
Executive Summary
5
Core Views
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
No Escaping A Slowdown
8
TABLE: KEY ECONOMIC INDICATORS
8
GDP By Expenditure Outlook
9
TABLE: PRIVATE CONSUMPTION FORECASTS
9
TABLE: GOVERNMENT CONSUMPTION FORECASTS
9
TABLE: FIXED INVESTMENT FORECASTS
10
TABLE: NET EXPORTS FORECASTS
10
Fiscal Policy And Public Debt Outlook
11
New Era Ahead As Huge Surpluses End
11
Structural Fiscal Position
12
Monetary Policy
13
Inflation Nearing Its Peak
13
Monetary Policy Framework
13
Banking Sector Update
14
Development Plans To Bolster Lending Activity
14
Chapter 2: 10-Year Forecast
17
The Kuwaiti Economy To 2025
17
High Wealth, Yet Challenges Remain
17
TABLE: LONG-TERM MACROECONOMIC FORECASTS
17
Chapter 3: Political Outlook
19
SWOT Analysis
19
BMI Political Risk Index
19
Domestic Politics
20
Little Impact From Break In Relations With Iran
20
TABLE: POLITICAL OVERVIEW
20
Long-Term Political Outlook
21
Democracy: No Turning Back
21
Chapter 4: Operational Risk
25
SWOT Analysis
25
Operational Risk Index
25
Operational Risk
26
TABLE: OPERATIONAL RISK
26
Trade Procedures And Governance
27
TABLE: MIDDLE EAST AND NORTH AFRICA - TRADE PROCEDURES AND GOVERNANCE RISK
27
TABLE: REQUIRED TRADE DOCUMENTS
28
TABLE: TRADE PROCEDURES
28
Vulnerability To Crime
29
Chapter 5: BMI Global Macro Outlook
31
Global Macro Outlook
31
Unfinished Business In 2016
31
TABLE: GLOBAL ASSUMPTIONS
31
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
32
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
32
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
33
TABLE: KUWAIT - MACROECONOMIC DATA & FORECASTS
35

Assess your risk exposure in Kuwait with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Kuwait with confidence.

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  • Delivery of the report in print and PDF
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  • The functionality to translate your online report into your choice of 10 languages - Arabic, Chinese, French, German, Italian, Japanese, Korean, Portuguese, Russian and Spanish
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