The International Monetary Fund revealed that Kuwait's overall economic growth slowed by 0.7 percent in 2019 from 1.2 percent in 2018.
According to a report issued by the Fund, the challenge of reducing dependence on oil "has become more urgent", indicating that Kuwait should enhance its revenues to work to impose value-added tax, among other measures.
The IMF revealed that Kuwait can withstand the recent shocks out of its strength, as the abundant assets in the Central Bank of Kuwait and the reserves managed by the General Investment Authority and the large lending space for the banking sector support the country's public financial resilience in the face of shocks.
The report also revealed that the growth in the real GDP of the non-oil sectors in Kuwait was boosted to about 3 percent in 2019 driven by government and consumer spending, and the real GDP of the oil sector shrank by about 1 percent under the OPEC + agreement.
The Executive Board of the International Monetary Fund stated that the low expectations of oil revenues affect growth in the near term on the one hand and public and external financial balances on the other hand, as this increased the need for reforms to create an active private sector and ensure adequate savings of oil wealth for future generations.
According to IMF, Kuwait possesses large financial reserves and low public debt, but that opportunities narrow in the face of its challenges from a position of strength, indicating that without correcting the path of the state’s public finances, the financial and financing challenges will increase sharply, as the recent rise in public spending has weakened the basic financial position of the state.
Source (Al Jarida Newspaper-Kuwait, Edited)
