LOC20:54
17:54 GMT
WASHINGTON, Sept 24 (KUNA) -- The International Monetary Fund affirmed on Wednesday that Kuwait's economy is recovering amid higher oil production and robust non-oil growth.
This came following an International Monetary Fund (IMF) mission in Kuwait City, led by Mr. Francisco Parodi, spanning from September 15 - 22, 2025.
Parodi said in a statement that Inflation continues to moderate, but lower oil prices are weighing on the fiscal and external balances.
Following a contraction in 2024, Kuwait's real GDP is projected to grow by 2.6 percent in 2025; This recovery is supported by a 2.4 percent rebound in oil sector output following the easing of OPEC+ production cuts, and a 2.7 percent rise in non-oil growth, underpinned by resilient private domestic demand.
Inflation is on a downward path, headline CPI dropped to 2.9 percent in 2024 and is expected to decline further to 2.2 percent in 2025, however, lower oil prices are putting pressure on fiscal and external balances.
The fiscal deficit is forecasted to widen to 7.8 percent of GDP in FY2025/26, while the current account surplus is set to moderate to 26.5 percent of GDP.
Financial stability remains sound. Credit to the non-financial private sector is projected to grow by 6.1 percent in 2025. Kuwaiti banks continue to maintain solid capital and liquidity positions, with low levels of non-performing loans.
The IMF highlighted Kuwait's vulnerability to oil market volatility but noted balanced risks overall. The mission also acknowledged progress on structural reforms, including the extension of the 15 percent corporate income tax to large multinationals and the approval of a new Public Debt Law.
The IMF urged faster reform implementation to diversify the economy, enhance competitiveness, and support non-oil sector growth.
The mission expressed appreciation to Kuwaiti authorities for their cooperation and reaffirmed its commitment to continued dialogue. (end)
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