Kuwaitis travel spending surges 9.2% to 4.39 billion dinars in 2023

• Expatriate remittances drop 28.5% to 3.86 billion dinars in 2023, the Central Bank of Kuwait revealed

• The value of Kuwait’s goods imports amounted to 10.1 billion dinars in 2023, marking a 16.8% rise compared to 2022

• Kuwait’s merchandise exports drop 16% to 23.9 billion dinars in 2023 from 28.79 billion dinars in oil exports in 2022

The data by the Central Bank of Kuwait revealed that the amounts spent by Kuwaitis on travel and tourism witnessed a growth of 9.2% by the end of 2023, reaching 4.39 billion dinars compared to the four billion dinars spent in 2022, according to preliminary data on Kuwait’s balance of payments for last year.

This increase is attributed to several factors, including the operation of new destinations in Europe and other countries, the expansion of airlines offering attractive family travel offers throughout the year, and a significant increase in flights to the Kingdom of Saudi Arabia to attend the Riyadh Season and participate in celebrations and programs organized by the Saudi Tourism Authority, which were widely accepted by Kuwaitis.

According to data, Kuwaitis’ travel spending in the past year has surged to its highest levels since the onset of the COVID-19 pandemic. The total spending for each quarter reflects this trend: 1.36 billion dinars in the first quarter, 1.01 billion dinars in the second quarter, 1.15 billion dinars in the third quarter, and 870 million dinars in the fourth quarter.

Spending by foreign tourists soars to 60%

The spending by foreign tourists in Kuwait saw a substantial 60% increase over the past year, soaring to 533.3 million dinars from 332.6 million dinars at the end of 2022.

On the other hand, the Central Bank data revealed a steady decline in remittances from expatriates abroad over the past year. The decrease was 28.5%, dropping to 3.86 billion dinars from the 5.4 billion dinars recorded in 2022.

Expat remittances

It’s worth noting that remittances from expatriates in Kuwait amounted to 5.5 billion dinars in 2021. This annual decline is attributed to both a reduction in the number of expatriates in Kuwait and the economic challenges faced by many Arab and Asian countries. These challenges have led expatriates to cut back on their annual remittances and hold onto the local currency. This decline marks the second consecutive year of decrease.

Remittances from expatriates in the first quarter of 2023 amounted to 1.2 billion dinars. This figure decreased to 892 million dinars in the second quarter of the previous year, followed by declines to 867 million dinars in the third quarter and 877 million dinars in the fourth quarter of that year.

Kuwait’s merchandise exports decline

The balance of payments indicated a 16% decline in Kuwait’s merchandise exports over the past year, dropping to 23.9 billion dinars from 28.79 billion dinars in oil exports in 2022, representing a decrease of approximately five billion dinars.

Meanwhile, total merchandise imports into Kuwait totaled 25.8 billion dinars during 2023, marking a 15% decrease compared to the 30.7 billion dinars in exports recorded in 2022.

The value of the country’s goods imports amounted to 10.1 billion dinars, marking a 16.8% rise from 8.6 billion dinars in 2022, equivalent to 1.5 billion dinars. It’s worth noting that Kuwait’s merchandise imports in 2021 totaled 8.4 billion dinars.

Surplus in current account drops 18.3% to 15.8 billion dinars in 2023

The Central Bank of Kuwait also released preliminary data for Kuwait’s balance of payments in 2023, alongside revised figures for 2022. The preliminary data reveals a surplus in the current account, amounting to approximately 15.8 billion dinars, marking an 18.3% decrease from the previous year’s 19.3 billion dinars. This decline is primarily due to a decrease in the merchandise balance surplus and an increase in the net deficit in the services account.

Regarding Kuwait’s balance of payments, preliminary data indicates a decrease in the merchandise balance surplus in 2023 by about 6.32 billion dinars, a 28.7% drop from the previous year’s 22.03 billion dinars.

This decline is mainly attributed to a decrease in oil export revenues by approximately 4.8 billion dinars, a 16.7% decrease, due to lower average global oil prices in 2023 compared to the previous year.

The services account, which reflects the net value of services transactions between residents and non-residents, including transportation, travel, communications, construction, and other services, as well as government services and goods, recorded a deficit of about 5.8 billion dinars in 2023. This is compared to a deficit of about 5.2 billion dinars in the previous year. The increase in the deficit value is primarily due to higher external flows in the travel sector during 2023.

The primary income account recorded a net surplus of about 9.9 billion dinars in 2023, compared to about 7.9 billion dinars in the previous year.

This increase in surplus in the last year is mainly attributed to the rise in investment income surplus, encompassing direct investment income, financial portfolio investments, other investments, and the reserve assets of the Central Bank of Kuwait.

The secondary income account showed a decrease in the value of the deficit in the net value of current transfers abroad, reaching about 3.97 billion dinars during 2023. This is compared to about 5.5 billion dinars during the previous year.

The decrease is mainly due to a decline in the value of expatriate workers’ remittances, which amounted to about 3.86 billion dinars in 2023, down from about 5.4 billion dinars in the previous year.

Preliminary statistics regarding the financial account, which records transactions of exchange of financial assets and liabilities between residents and non-residents in the local economy, of Kuwait’s balance of payments indicate a net financial outflow during 2023. This outflow amounted to about 15.5 billion dinars, compared to a net financial flow abroad of about 19.7 billion dinars in the previous year.

Due to developments in the main accounts of the balance, Kuwait’s overall balance of payments for 2023 recorded a deficit of about 150.2 million dinars, compared to a surplus of about 1.1 billion dinars in the previous year.