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 3.8% and 4.0% for 2015 and 2016 respectively, up from 3.0% in 2014. 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 2014e 2015e 2016f 2017f
National Sources/BMI
Real GDP growth, % y-o-y -1.6 1.5 1.2 1.9
Nominal GDP, USDbn 163.5 124.2 127.6 132.3
Consumer price inflation, % y-o-y, eop 3.0 3.4 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 -3.6 0.5
Current account balance, % of GDP 32.5 9.1 9.5 10.2
Executive Summary
5
Core Views
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Index
7
Domestic Politics
8
Reduction In External Risks Following Iran Deal
8
TABLE: POLITICAL OVERVIEW
8
Long-Term Political Outlook
9
Democracy: No Turning Back
9
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Index
13
Economic Activity
14
Growth Slowing As Oil Take Its Toll
14
TABLE: KEY ECONOMIC INDICATORS
14
TABLE: PRIVATE CONSUMPTION FORECASTS
14
TABLE: GOVERNMENT CONSUMPTION FORECASTS
15
TABLE: FIXED INVESTMENT FORECASTS
15
TABLE: NET EXPORTS FORECASTS
16
Fiscal Policy
17
Dipping Into Deficit
17
TABLE: FISCAL POLICY
17
Banking Sector
18
Public Spending To Partially Mitigate Lower Oil Prices
18
Investment Climate
19
Positive Steps On Investment, But Longer Term Issues Ahead
19
Islamic Banking
20
Islamic Banking - Slowdown In Place
20
Regional Economic Outlook
23
Picking The Outperformers: UAE, Iran And Egypt
23
Chapter 3: 10-Year Forecast
27
The Kuwaiti Economy To 2024
27
High Wealth, Yet Challenges To Growth
27
TABLE: LONG-TERM MACROECONOMIC FORECASTS
27
Chapter 4: Operational Risk
29
SWOT Analysis
29
Operational Risk Index
29
Operational Risk
30
TABLE: OPERATIONAL RISK
30
Education
31
TABLE: MIDDLE EAST AND NORTH AFRICA - EDUCATION RISK
32
TABLE: GRADUATES OF TERTIARY EDUCATION ('000)
33
Government Intervention
34
TABLE: MIDDLE EAST AND NORTH AFRICA - GOVERNMENT INTERVENTION RISK
35
Chapter 5: BMI Global Macro Outlook
39
Global Outlook
39
Global Growth Weak As EMs Squeezed
39
TABLE: GLOBAL ASSUMPTIONS
39
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
40
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
40
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
41

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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