Kuwait Economic Growth to Slow to 3.2% in 2013, NBK Forecasts

Kuwait’s real gross domestic product growth is forecast to slow to 3.2 percent this year from 6.1 percent in 2012, supported by stable oil production, National Bank of Kuwait said.

NBK raised its forecast for real non-oil growth in 2013 to 5 percent from 4 percent, “based largely on signs of a greater determination by Kuwaiti authorities to implement large infrastructure projects” that had previously stalled, the country’s biggest lender said in an e-mailed report. “This should ease the economy’s dependence on growth in the consumer sector, which will nevertheless remain firm thanks to high employment levels and fresh government measures to support income growth.”

Kuwait, the fourth-biggest producer in the Organization of Petroleum Exporting Countries, posted a record budget surplus of 13.2 billion dinars ($47 billion) in the last fiscal year as oil production and prices rose. The International Monetary Fund forecasts economic growth at 1.8 percent this year, down from estimated growth of 6.6 percent in 2012. The Gulf state pumped 2.75 million barrels of oil a day in January, according to data compiled by Bloomberg.

Kuwait’s government and parliament have pledged to put a $110 billion development plan, first approved in February 2010, on a fast track after political bickering slowed implementation. The plan to diversify the oil-reliant economy and modernize the country includes boosting crude and gas production, building a metro and rail network, new hospitals, roads, power stations, expanding the airport and building a port on Boubyan Island.

To contact the reporter on this story: Fiona MacDonald in Kuwait at fmacdonald4@bloomberg.net

To contact the editor responsible for this story: Shaji Mathew at shajimathew@bloomberg.net

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