The International Monetary Fund stated that its outlook for the Kuwaiti economy is subject to uncertainty and risks surrounding the external environment, including the potential effects of monetary policy tightening in major advanced economies, and further global slowdown.
The IMF mission of experts, on the occasion of the end of its visit to the country, indicated that fluctuations in oil prices and the quantities of its production, as a result of external factors, including the geopolitical environment, would affect economic activity, explaining that the delay in major financial and structural reforms may lead to an increase in the risks of pro-cyclical financial policies, impeding progress towards greater economic diversification and increased competitiveness.
It expects that output growth would rise to more than 8 percent this year, but in 2023 it is likely that growth will decline, reflecting the slowdown in external demand for oil and the reductions in its production under the “OPEC +” agreement.
The mission stated that the government has so far been able to contain the direct negative repercussions of the Russian war in Ukraine, as well as contain inflation by taking advantage of monetary tightening and limited passage of increases in global food and energy prices thanks to government subsidies and managed prices.
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