Country Profiles
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Kuwait
Kuwait is situated in the northern edge of the Arabian Peninsula at the tip of the Persian Gulf, bordering Iraq to the north and Saudi Arabia to the south. With a coastline of approximately 311 miles, Kuwait also shares a maritime border with Iran.
Maps & Flag
Most of Kuwait’s population reside in the urban agglomeration of Kuwait City, the capital city. As of 2024, had a population of 4.91 million, of which 1.54 million were Kuwaiti citizens; the remaining 3.36 million were foreign nationals from a multitude of countries.
The Economist Intelligence Unit’s 2023 Democracy Index ranks Kuwait 114th out of 167 countries and territories, a worsening of three places compared with the 2022 index (EIU, 2024). According to the UK think-tank, Kuwait’s score has deteriorated to 3.50 out of 10, from 3.83 in 2022, “driven primarily by a sharp fall in the political participation score.” Kuwait then is categorised as an “authoritarian” regime as are all other of its Arabian Gulf neighbours. That being said, the EIU do state that “Kuwait has a more open polity than most of its fellow GCC states, and ranks the highest among them as a result.”
OPEC related oil production cuts have weighed down growth. However, output should gradually recover supported by still buoyant non-oil activity and infrastructure spending, and as oil output is ramped up. Pressure on fiscal and current account balances is easing. Key challenges include hydrocarbon dependence and parliamentary opposition to deep structural reforms.
Hydrocarbons account for nearly half of GDP, and the OPEC’s June decision to extend production cuts until the first quarter of 2018 has weighed on oil output and exports. Outside the oil sector, activity has remained supported by the implementation of the five-year Development Plan (2015/16-2019/20) which contains several large infrastructure, transport and refinery projects. In January, the government released the New Kuwait 2035 Strategic Plan, which aims to transform the country into a regional, financial and commercial hub as part of long-term economic diversification efforts.
Incoming data suggest that non-oil activity is continuing to expand. Consumer confidence rose in July to its highest level in almost two years, although it remains well below 2014 levels prior to the fall in global oil prices. Consumer spending, as reflected in point-of-sale transactions, strengthened in Q2, rising 9 percent y/y. The correction in property markets over the past two years appears to have run its course: real estate prices have stabilized in recent months, and residential sector sales rose by a robust 43 percent y/y in July. While the banking sector remains well capitalized and generally healthy, bank lending to both firms and households has slowed over the past year. However, growth in lending to “productive” business sectors (this excludes real estate and securities lending) remained resilient at 8.4 percent y/y in July.
Notes Country profile information is compiled from, amongst others, the following sources. See the Reference list below for detailed information.
References
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| i | This is the website of Dr Emilie J. Rutledge who, with almost two decades’ worth of experience in managing, designing and delivering university-level economics courses, is currently Head of the Economics Department at The Open University.
 erutledge.com  Dr Emilie J. Rutledge Emilie has published over 20 peer-reviewed papers and is the author of “Monetary Union in the Gulf.” Her current research focus is on employability, the feasibility of universal basic incomes and, the oil-rich Arabian Gulf’s economic diversification and labour market reform strategies. On an ad hoc basis, Emilie provides consultancy on developing interactive university courses, alongside analytical insight on the political-economy of the Arabian Gulf. |