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Kuwait's gross domestic product (GDP) is expected to grow 2.5% this year after falling 2.9% in 2017, boosted by higher oil production, National Bank of Kuwait (NBK) said in a report.
According to the report, oil GDP growth fell by 8.0% in 2017 as Kuwait cut its production to 2.7 million barrels per day, in compliance with the OPEC agreement. Whereas the production stabilized in the first months of 2018, after OPEC took the decision to raise again the production.
The report also predicted that Kuwait's production would rise to 2.8 million bpd in the second half of 2018, which would lead to a 1.5 % increase in oil GDP this year and a similar rate in 2019. Efforts to raise production capacity (excluding production from the common region with Saudi Arabia) to 3.65 million barrels per day (bpd) from 3.15 currently, which would initially allow production to increase in the coming years by about a third from current levels.
The report shows that consumer spending has been maintained at the pace of its recovery since 2016, supported by strong employment growth, low inflation, the erosion of government subsidies and a rebound in public confidence due to higher oil prices expecting the growth to be supported by the expansion of fiscal policy for 2018-2019.