According to Fitch Solutions, a credit rating agency, consumer spending in Kuwait is expected to experience moderate and stable growth of 4.4 percent in 2023. Al Qabas reported that the agency predicted that the total consumer spending (in nominal terms) in Kuwait will reach KD 20.6 billion in 2023, up from KD 19.2 billion in 2022. The company also expects Kuwait’s GDP growth to reach 2.7 percent in 2023 and 5.1 percent in 2024, with inflation at 3 percent in 2023 and 2.2 percent in 2024.
Moreover, the agency noted that its forecast for the growth of consumer spending in Kuwait this year supports its expectations that the introduction of the value-added tax will be postponed until 2024 due to concerns about inflation and political problems. The agency’s risk team believes that oil prices will remain strong in 2023, which will support public and private sector spending in Kuwait for the next 12 to 14 months.
The latest retail trade data in Kuwait also indicates strong growth in consumer spending, according to the agency. Retail transactions in the last quarter of 2022 were recorded at USD 4.2 billion, compared to KD 3.7 billion in the first quarter of 2021. Fitch Solutions believes that high oil prices and the delay in introducing the value-added tax will further support consumer spending growth in 2023.