A report issued by "Moody's" Investor Services Agency, entitled: "A Outlook on the Banking System in Kuwait", showed that the stable future outlook of the Kuwaiti banking sector reflects expectations that the non-oil economy will continue to recover.
It expected that the GDP growth in the non-oil sectors will reach 4 percent in 2022 and 2023 after a healthy growth of 5 percent in 2021. The quality of domestic loans will remain sound so that companies and families resume their normal activities after "Covid-19".
According to Moody's, the large exposure of banks to the real estate sector poses risks, but the banks' abundant reserves from loan losses and their strong capital provide buffers, as the banks will remain funded by deposits, which is one of the credit strengths. Moody's indicated that the recovery of Kuwait's economy will support the growth of non-oil GDP, expecting real GDP growth of 8% in 2022, from 0.8% in 2021, thanks to the increase in oil production and prices. Moody’s revealed that the improvement of the government's financial position would support public spending, and that this matter, along with easing the restrictions of the pandemic, would strengthen the non-oil economy so that banks would carry out most of their work, provided that the latter would witness a strong demand for credit from individuals and companies.
Source (Al-Rai Kuwaiti Newspaper, Edited)
