1. Market Research
  2. > Energy & Environment
  3. > Energy
  4. > Oil and Gas Energy Market Trends
  5. > Kuwait Business Forecast Report Q4 2014

Kuwait Business Forecast Report Q4 2014

  • July 2014
  • -
  • Business Monitor International
  • -
  • 42 pages

Core Views
We expect the Kuwaiti economy to perform relatively well over 2014 and 2015, and retain our forecast for real GDP growth of 2.9% and 2.7% respectively, from an estimated 3.0% in 2013. After a long period of stagnation, the Kuwaiti investment outlook appears to be improving, while the prospects for consumption remain bright. However, we again highlight Kuwait's ever-volatile political situation as the key downside risk to economic activity. Kuwait has seen a flurry of populist legislation recently, including
several measures specifically targeting expatriate workers. This runs the risk of increasing uncertainty within the private sector, as well as cementing perceptions of the country as a hub of policy instability. We expect some tensions to remain between the government and the legislative branch, even with the election of a renewed 'loyalist'

We forecast average consumer price inflation for Kuwait of 3.8% and 4.0% for 2014 and 2015 respectively, up from 3.3% in 2013. While we expect a slight fall in Kuwaiti food inflation over the near term on the back of lower global prices, a tight supply picture in the real estate market will fuel housing inflation over the coming quarters, in a trend seen across the GCC.

Key Risks To Outlook
As ever, given the economy's heavy dependence on oil, any sustained downturn in global energy prices would prove disastrous. That said, Kuwait has the financial wherewithal to cope with any short-term volatility in oil prices, and therefore the underlying risks in this regard are minimal.

Table Of Contents

Kuwait Business Forecast Report Q4 2014
Executive Summary.... 5
Core Views..5
Key Risks To Outlook....5
Chapter 1: Political Outlook.. 7
SWOT Analysis.... 7
BMI Political Risk Ratings. 7
Foreign Policy. 8
Minimal Risks From ISIS Advance, For Now..8
The rapid gains by the Islamic State of Iraq and the Levant (ISIS) across Iraq and Syria pose a significant threat to stability in
neighbouring countries. However, despite government proclamations, we believe Kuwait faces less significant risks given the country's
military capabilities and buffer of southern Iraq. That said, returning Kuwaiti fighters from ISIS's ranks present a longer-term risk. 8
Table: Political Overview....8
Long-Term Political Outlook.. 9
Democracy: No Turning Back.9
Kuwait's political backdrop is complicated by labour and population imbalances, as well as a parliament which has consistently blocked
the government's reform efforts. Meanwhile, with six dissolutions of the National Assembly and subsequent elections since 2006, the
prospect of new polls and policy instability is always on the horizon.
Chapter 2: Economic Outlook.. 13
SWOT Analysis.. 13
BMI Economic Risk Ratings. 13
Economic Activity . 14
Consumption And Investment To Drive Growth14
Kuwait's economy will perform relatively well over H214 and 2015, and we retain our forecast for real GDP growth of 2.9% and 2.7
%in 2014 and 2015 respectively, from an estimated 3.0% in 2013. Growth will increasingly be driven by investment and consumption;
however, economic activity in Kuwait will lag the rest of the Gulf States, and risks are weighted to the downside due to the country's
ever-volatile political situation.
Table : Economic Acti vit y....14
Fiscal Policy . 16
Subsidy Reform For Nationals Highly Unlikely.16
Kuwait's generous subsidy system is not set for substantial reform despite increasing calls for a review of the scheme. Kuwait's
political structure and the need for parliamentary approval are likely to prevent the passage of any subsidy reforms affecting nationals.
By contrast, we expect the provision of subsidies to Kuwait's vast expatriate population to be gradually reduced over the coming
Table: Fiscal Policy....16
Banking Sector . 18
Brightening Outlook18
We hold a moderately bullish outlook for Kuwaiti commercial banks over 2014 due to improvements in the operating environment and a
slight pick-up in government investment spending and construction activity. We forecast credit growth of 7.5% by the end of 2014, from
7.3% in 2013 and just 3.1% in 2012. As ever, the country's political situation remains a key downside risk.
Monetary Policy 19
Housing To Push Inflation Higher...19
Kuwait's consumer price inflation will average 3.4% and 4.0% in 2014 and 2015 respectively, from 3.0% in 2013. We anticipate the trend
of global lower food prices to be coming to an end, and see some risks of a food price spike. However, it is the housing market which
will have the largest impact as a tight supply picture sees price gains in the real estate sector - a trend seen across the GCC.
Table : Monetar y Polic y.19
Islamic Finance . 20
Growth To Slow, But New Markets To Surface..20
Islamic finance is set for continued growth as several countries vie to become global centres, although expansion rates have peaked. At
present, we expect Malaysia to remain the global leader in Islamic banking, although there will be concerted competition from Dubai. In
addition, there is huge growth potential in India, Nigeria and Thailand.
Table : GCC Islamic Bonds ....20
Chapter 3: 10-Year Forecast 23
The Kuwaiti Economy To 2023.. 23
High Wealth, Yet Challenges To Growth..23
Kuwait faces substantial structural challenges over the long term, but the energy sector will continue to grow in real terms to 2023,
keeping the government in surplus.
Table : Long -Term Macr oec onomic Forecasts ..23
Chapter 4: Business Environment 25
SWOT Analysis.. 25
BMI Business Environment Risk Ratings 25
Business Environment Outlook 26
Institutions.... 26
Infrastructure 27
Market Orientation.. 29
Operational Risk 31
TABLE: Top Export Destinations31
Chapter 5: Key Sectors.. 33
Pharmaceuticals and Healthcare.. 33
Table : Pharmaceutical Sales Indicat ors , 2010-2018 ...34
Table: PRIVATE Healthcare Indicators, 2010-2018 ..35
Table : GOV ERNMENT Healthcare Indicat ors , 2010-2018 ...35
Table: Healthcare Expenditure Indicators, 2010-2018 ...35
Telecommunications... 37
Table : Telec oms Sect or - Mobile - Hist orical Data and Forecasts . 37
Table : Telec oms Sect or - Wireline - Hist orical Data and Forecasts .. 39
Chapter 6: BMI Global Assumptions. 41
Global Outlook... 41
Global Recovery Still On Track..41
Table : Global Assumpti ons ....41
Table: Developed States, Real GDP GrowtH, %.42
Table : Emerging Markets , Real GDP Growth , %43

View This Report »

Get Industry Insights. Simply.

  • Latest reports & slideshows with insights from top research analysts
  • 24 Million searchable statistics with tables, figures & datasets
  • More than 10,000 trusted sources
24/7 Customer Support

Talk to Veronica

+1 718 514 2762

Purchase Reports From Reputable Market Research Publishers
Biorefinery Technologies: Global Markets

Biorefinery Technologies: Global Markets

  • $ 6650
  • Industry report
  • July 2016
  • by BCC Research

This BCC Research report provides a critical evaluation of the current status of commercial biorefinery markets and the ways in which recent environmental legislation and breakthroughs in technology will ...

Oilfield Process Chemicals: Global Markets

Oilfield Process Chemicals: Global Markets

  • $ 6650
  • Industry report
  • September 2016
  • by BCC Research

Use this report to: - Analyze the chemicals involved in oil and gas exploration and production at the chemical manufacturing sales level - Discuss and classify the market on the basis of chemical application, ...

Industrial Plugs & Sockets Market by Protection, Type, End-User - Global Forecast to 2021

Industrial Plugs & Sockets Market by Protection, Type, End-User - Global Forecast to 2021

  • $ 6328
  • Industry report
  • October 2016
  • by MarketsandMarkets

“The industrial plugs & sockets market is projected to grow at a CAGR of 4.82% from 2016 to 2021” The industrial plugs & sockets market is projected to reach USD 3.60 billion by 2021, growing at a ...


Reportlinker.com © Copyright 2016. All rights reserved.

ReportLinker simplifies how Analysts and Decision Makers get industry data for their business.