According to a report released by Kamco Invest, Kuwait experienced a remarkable surge in project awards during 2023, reaching its highest levels in five years, with a total value of $8.2 billion. This represents a significant increase from the $2.1 billion awarded in 2022, marking a staggering 300% growth. Notably, this rate of annual growth in the total value of contracts awarded in the Gulf Cooperation Council (GCC) countries is the highest across the region, reported Al-Anba.
The surge in project awards in Kuwait can be attributed primarily to infrastructure investments, particularly in the transportation and energy sectors. As one of the most creditworthy economies in the Middle East and Gulf region, Kuwait’s high revenues have allowed for robust investment in projects, ensuring a steady project market in the upcoming years. In the energy sector alone, the total value of projects awarded in 2023 witnessed a twelve-fold increase, reaching $3 billion, compared to $246 million in 2022.
Similarly, the transportation sector saw a significant boost, with project awards totaling $2.7 billion compared to $754 million in the previous year. These two sectors combined accounted for 68.8% of the total value of projects awarded in Kuwait throughout the year. The report also highlights the increase in project awards across the GCC countries, which nearly doubled in 2023, amounting to $209.8 billion compared to $109.7 billion in 2022.
This progress showcases the commendable efforts made by governments in the region to promote economic development and diversification, particularly spearheaded by Saudi Arabia’s diversification plans. Looking ahead, Kamco Invest expects the project market in the Gulf countries to remain strong in 2024, with projects already in the bidding stage or scheduled to be awarded expected to exceed $270 billion across the Middle East and North Africa region.
Saudi Arabia is foreseen to lead the growth prospects with $107.2 billion, followed by the UAE with $51.5 billion and Kuwait with $19.8 billion. These promising projections reflect the determination of regional governments to reduce dependence on oil revenues and implement reforms for long-term economic sustainability.
Furthermore, with expectations of improved economic growth in 2024, following a challenging year in 2023 due to reduced oil production quotas, the project market across the Gulf countries is set to witness even stronger performance. In December 2023, Kuwait contributed $450 million to the total project awards in the Middle East and North Africa region, ranking fourth among Gulf countries and sixth regionally.
Some significant contracts awarded during the month included a $442 million contract by the Ministry of Electricity, Water, and Renewable Energy for the rehabilitation of the Al-Zour South Power and Water Distillation Station, as well as an $8 million contract awarded by Al-Ansari Real Estate Company for establishing infrastructure for the light industries complex.
While Kuwait’s project market value slightly declined to $175 billion from December 14 to January 12, it remains a formidable player, ranking fifth among the Gulf countries. The project market in Saudi Arabia retains the top spot with projects worth $1.805 trillion, followed by the UAE and Oman with values of $705 billion and $231 billion, respectively. Qatar, however, was absent from the list. As the project market continues to flourish in Kuwait and the wider GCC region, these endeavors are expected to pave the way for sustained economic growth and a diversified future.
