Economic trends
Kuwait is a rich country, a welfare state financed by oil revenues (52% of the GDP and (93% of exports in 2011), to benefit inhabitants with a high per capita income of about 30,000 USD. The country has 9% of the world oil reserves and in 2011 registered, for the twelfth consecutive year, a budget surplus estimated at around 19.5 miliard USD. Kuwait is trying to position itself as the entrance gate for investment in the area. The public sector dominates the economy and concentrates three quarters of the country's wealth. In February 2010, a 2010-2015 plan to develop infrastructure has been signed, worth USD 100 billion, with the special aim of opening the country's economy to the private sector.
Thanks to the increases in the price per barrel of oil, whcih reached an average of 110 USD, and the increase in production, Kuwait's financial health in the coming years is guaranteed, with budget surpluses of about 10 to 20%. The country grew by 5.7% in 2011.
The income from the country's oil allows to fuel a particularly generous welfare system (automatic access to public employment, artificial maintenance of public prices and prices of basic products at a very low level, high subsidies for home-buyers, generous medical insurance, etc.)
Despite its economic and financial health, Kuwait wants to move from a rentier economy to a more open and diverse economy. The authorities are also concerned about the enlarged public sector, built on and funded by oil revenues, the limits of which are already being felt in terms of job creation and investment.
Main branches of industry
Agriculture activity is very limited due to lack of water and arable land. Agriculture contributes only 2% to GDP.
With 100 billion barrels of oil in reserve (i.e. 9% of the world's total and representing 100 years of production), the country's industry is based on oil exploitation. Income from this sector represents more than half of GDP and more than 90% of exports, i.e. more than 95% of the country's income. By 2030, Kuwait is also planning to invest more than USD 87 billion in the oil sector, especially in creating new oil refineries.
The non-oil sector is dominated by services, mostly real estate and financial services, which were relatively hit by the financial crisis.
For further information, consult the "Doing Business in Kuwait" guide by the National Bank of Kuwait.
International trade
Kuwait is highly dependent on foreign trade, which represents nearly 95% of the GDP. The country depends particularly on imports of foodproducts, consumer goods (40% of the total) and semi-finished products (38% of the total), which ranks it among countries with the highest per capita import rate. The imports have been increasingly quickly due to the country’s undertaking of large projects and a high private consumption demand.
Representing almost all export earnings of the country and almost two-thirds of the GDP in 2012, the Kuwaiti oil is sold mostly to Asian countries. Significant reserves of non-associated gas were discovered in the north of the country. Their exploitation, due to start shortly, should cover the needs of local consumption (power generation, desalination of sea water ...) and generate a portion of oil production for export.
Kuwait’s largest suppliers are the United States, China, Saudi Arabia and Germany. Imports from other Gulf countries have increased since the introduction of the GCC (Gulf Cooperation Council). The main products imported are cars, agricultural and food products, as well as mechanical industrial products, electric and electronic products.
Kuwait’s exports quadrupled since 2002. Exports of crude oil and refined products accounted for 93% of the total in 2011. The remaining amount consists of re-exports, mainly of machinery and transportation equipment. Kuwait’s main clients are the Asian countries, especially Japan, South Korea, Taiwan, and China but also the United States and India. The trade balance of Kuwait is largely positive due to the high prices of oil.
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Last updates: May 2012
