Ratings agency S&P has said that Kuwait’s economy will likely return to growth in 2018 after a difficult past 12 months. It reaffirmed a rating of “AA/A-1+” and stated that the country is stable.
Like many oil-producing countries, 2017 was a challenging year for Kuwait. S&P’s report outlined how Kuwait’s economy remains “undiversified” because it derives about 60 percent of its GDP, more than 90 percent of exports, and about 90 percent of fiscal receipts from hydrocarbon products. As a result, its gross domestic product fell by 2.3 percent over the year as oil prices remained underweight.
However, the picture for 2018 is more positive, with S&P predicting a 2.5 percent growth in 2018 as energy prices rise and oil production starts to climb moving int0 2019.
“Kuwait’s large government and external net asset positions will continue to afford the authorities space to gradually consolidate government finances,” the report said.
“The stable outlook reflects our expectation that Kuwait’s public and external balance sheets will remain strong over the forecast horizon, backed by a significant stock of financial assets. We expect these strengths to offset risks related to lower oil prices, Kuwait’s undiversified economy, and rising geopolitical tensions in the region.”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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