The International Monetary Fund (IMF) has downgraded its forecast for GDP growth in Kuwait by 40 percent, a senior official said on Tuesday.
The growth forecast for 2013 has been revised from 1.8 percent to 1.1 percent, IMF deputy division chief of the Middle East and Central Asia Department, Ananthakrishnan Prasad, revealed on the sidelines of a finance conference in Kuwait City.
Prasad said the oil-rich country's poorer than expected performance in non-oil sectors during 2011 had forced the downgrading.
Kuwait's actual non-oil results for 2011 showed growth at only 0.9 percent, less than expected.
Prasad said headline growth had been high because Kuwait was producing more oil, particularly last year when it increased output to compensate for a decline in Libya amid political turmoil, but that was not expected to continue.
“That growth will go down in 2013 and we think the headline growth will be only around 1.5 percent in 2013 but we think that the non-oil growth will pick up now that the political situation is a bit stabilised and people will be able to concentrate on the economy,” Prasad said.
“Kuwait non-oil growth has been low basically because there has been corporate restructurings going on, also because implementation of the development plan has been lagging. But now we hope that it'll pick up.
“We are estimating around 2.7 percent growth in the non-oil GDP in 2012. In 2013 we are slightly upping it to around 4 percent because now we're thinking the development plan [will be implemented more rapidly].
“Total GDP growth [is forecast at] 1.1 percent – downgraded from 1.8 percent. [The IMF] revised it down slightly, because of the oil growth, which is negative.”
The IMF has forecast that declining oil revenues will lead Kuwait to record its first deficit in nearly two decades by 2017, unless it manages to diversify its revenue streams.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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