The World Bank raised its forecast for real GDP growth for Kuwait this year from 5.7 percent in its previous estimates in April to 8.5 percent in 2022, making the Kuwaiti economy the best performing among the countries of the Gulf Cooperation Council.
In its report on the latest economic developments, entitled “A New State of Mind: Enhancing Transparency and Accountability in the Middle East and North Africa,” the Bank expected that Kuwait’s real GDP per capita would increase by 7.4 percent in 2022 compared to 4.5 percent in its previous forecasts. The per capita share will rise to 1.4 percent next year, down from the bank’s previous estimates of 2.5 percent, reports a local Arabic daily.
It is likely that the balance of the current account in Kuwait will reach 28.6 percent of the GDP in 2022, and 23.6 percent in 2023, provided that the overall balance of the public budget will reach 1.1 percent of the GDP during the current year, to shrink to -0.5 percent Next year.
The bank expected that the Middle East and North Africa region will record economic growth of 5.5 percent in 2022, the fastest pace since 2016, before slowing to 3.5 percent next year; and the economy of the six Gulf Cooperation Council countries is likely to grow by 6.9 percent this year, a full percentage point higher than the World Bank forecast six months ago.
The bank stated that higher oil prices have strengthened the fiscal space of the Gulf Cooperation Council countries and will lead to fiscal surpluses for most oil-exporting countries in 2022, even after additional spending on inflation mitigation programs.
The report added, “However, oil-importing developing countries do not have such exceptional gains, and they will have to reduce other aspects of spending and search for new sources of revenue or increase deficits and debts to finance inflation relief programs and any other additional spending.”