A recent government economic report expected that the Kuwaiti non-oil sector would witness upward growth in the coming years thanks to the new gains of the Kuwaiti economy in the field of refining of the two environmental fuel projects and Al-Zour refinery.
Referring to the development of the main indicators of the Kuwaiti economy during the period between 2020 and 2022 the special government report pointed to the development of the main indicators of the Kuwaiti economy during the period 2020-2022 at the level of gross domestic product, reports a local Arabic daily.
The Kuwaiti economy witnessed a significant recovery at the beginning of 2022 as a result of the rise in international oil prices to their highest levels with the escalation of tension between Russia and Ukraine. This led to an increase in concerns about oil supplies and pushed its price to more than $100 a barrel, and the gradual improvement in global oil prices began in 2021 coinciding with the “OPEC+” alliance agreement to reduce oil production levels as an attempt to save global oil markets after their collapse during the Corona pandemic in 2020, which generated large budget deficits in many countries at the time, including Kuwait.
The report stated that the value of oil exports rose to an all-time high in the first quarter of 2022 compared to at least the past ten years, while oil revenues from the 2021/2022 general budget constituted 84% of the state’s total revenues, while non-revenues amounted to 16%, down from the previous fiscal year 2020/2021 by 38.9%.
With regard to consumer spending of citizens and residents in the country by the end of 2021, the report stated that it witnessed a record increase compared to spending levels during 2020, and this came in conjunction with the end of the strict restrictions imposed to confront the Corona pandemic, the opening of the airport, and the return of its full operational capacity and economic activities others returned to normal, in addition to postponing citizens’ installments for a full year and residents’ installments for a period of 6 months, which provided great liquidity and boosted their consumer spending during 2021.
The report indicated that there has been an improvement in the performance of fixed investment, coinciding with the strong local economic growth at the beginning of 2022 and since the beginning of its recovery in 2021 compared to 2020, and this improvement is a fundamental pillar for increasing production, raising the standard of living and achieving economic progress in the country.
On the level of capital spending that contributes to the formation of investment and production assets, the draft general budget for fiscal 2022/2023 was presented, and it included a rationalization of public spending while maintaining a healthy proportion of capital spending to support the wheel of the national economy, as it was estimated at 13.2% of total expenditures.
The general budget (2021-2022) also witnessed a reduction in capital spending as a result of the delay in government bids and supply chain restrictions resulting from the Corona pandemic, which led to the postponement of many construction, housing and development projects, and this economic reform represented by rationalizing spending came after a decade of capital expenditures with a curve escalating to 2020/2021.
The report indicated that Kuwait’s budget witnessed a rationalization of public spending for the year 2021/2022 compared to the year 2020/2021, as a result of the Cabinet’s decision to rationalize spending, reduce and control expenditures and cancel unnecessary and secondary expenditures that do not affect the performance of government agencies in the general budget 2021/2022.
The report also indicated that merchandise imports rose in 2021 compared to 2020, and vehicles, jewelry, and precious metals were among the most prominent imported commodities in 2021.
The report indicated that the strategic development projects of the Public Authority for Partnership Projects between the public and private sectors faced and still face several challenges, the most important of which are the financial and administrative, which caused the cancellation and delay of some of the Authority’s projects.
The report pointed out that state-owned companies, in addition to the National Fund for Small and Medium Enterprises, performed poorly in terms of major strategic projects, as their participation is almost non-existent in modern projects with outstanding added value for the local market.