Kuwait Economic Growth to Slow This Year, NBK ForecastsFiona MacDonald
Kuwait’s real gross domestic product growth is forecast to slow to 3.2 percent this year from 6.1 percent in 2012 as the nation’s oil production probably reached its peak, 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 per day in January, according to data compiled by Bloomberg.
Kuwait’s production levels reached close to their maximum capacity of 3.3 million barrels a day last year, “and softer global oil market fundamentals are assumed to prompt OPEC to stabilize its output near current levels,” slowing Kuwaiti growth in 2013, NBK said.
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.