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publication October 3, 2018

Kuwait's Economic Outlook, October 2018

With hydrocarbons accounting for nearly half of GDP, the economy contracted by 3.5 percent in 2017 weighed down by OPEC related oil production cuts. Overall, the oil sector contracted by 7.2 percent; however, growth in the non-oil sector held up at 2.2 percent, supported by a steady growth in household spending and higher government consumption spending. Investment spending slowed during 2017, following a surge during 2016 when the government stepped up implementation of the five-year Development Plan (2015/16-2019/20).

Growth is expected to rebound to 1.5 percent in 2018 as oil output and exports increase, and higher government spending supports the non-oil sector. Plans to invest US$115 billion in the oil sector over the next five years should further boost oil production.