State of Kuwait: Economic & Financial Facts 19 Sept-2013 Kuwait s nominal GDP is estimated to have recorded at KWD 51.3 billion (USD 179.5 bn) in 2012 and is forecasted to further grow to KWD 52 billion (USD 182 bn) in 2013 underpinned by high oil prices and output level at 2.92 million b/day along with favourable business environment. GDP is expected to continue posting healthy growth rates in the medium-to-long term (2014-2017) with forecasted average annual growth rate in real GDP of 3.7%. The provisional estimates of Kuwait s National Accounts for 2012 published by the Central Statistical Bureau indicate that Kuwait s nominal GDP grew at 15.7% in 2012 to record an all-time high of KWD 51.3 billion (USD 179.5 billion). The robust growth was fuelled by high oil prices that averaged above USD 100/barrel during the year along with healthy growth in the non-hydrocarbon sector underpinned by positive business environment and the gradual recovery in the private sector. Oil GDP grew at 19.4% to KWD 32.1 billion accounting for 63% of 2012 GDP, while Non-oil GDP also witnessed a healthy growth of 10% to a record high of KWD 19.2 billion (USD 67 billion). Despite the healthy growth in the non-hydrocarbon sector, which contributed 37% to the Kuwaiti economy, the Hydrocarbon sector remains the key contributor to economic growth with a 63% share of the GDP in 2012. Moreover, oil revenues continue to represent the bulk of government revenues at 94% of total revenues for the fiscal year 2012/13. Historically, the hydrocarbon sector has made up the largest component of Kuwait s GDP, averaging at 56% over the period from 2005-2012. The Public Sector (Hydrocarbons and Community Services) has dominated the Kuwaiti Economy with an average share of 69% of Nominal GDP over the period 2006-2012, while the Private Sector accounted for the remaining 31%. The government s fiscal policy of spending on community services and salaries along with high oil revenues were the key growth drivers for the economy. Per-capita GDP figures for 2012 increased to KWD 13,413 (USD 46,946) up from KWD 12,203 (USD 43,321), among the highest in the region and the world. However, sustaining such figures require diversifying away from the hydrocarbon sector and enhancing the performance and contribution of the non-hydrocarbon sector, represented by the private sector and its key segments (industrial, financial, real estate and construction, transportation, and trade). Kuwait s Public finances are heavily dependent on oil revenues, making up 94% of total revenues for the fiscal year 2012/13 recording at KWD 29.97 billion (USD 104.9 billion) up from KWD 28.57 billion (USD 100 billion) for fiscal year 2011/12, representing an annual growth rate of 4.9%. This exposes the government s spending on productive sectors to the risk of volatile oil prices. Oil Revenue had been volatile over the last 8 fiscal years driven by the imbalance in the oil market along with global economic sentiments. As an oil-based economy, hydrocarbon revenues accounted for around 94% of government revenues over the last 8 fiscal years (2005/06 to 2012/13) and amounted to around KWD 160.4 billion (USD 561.4 billion) while non-hydrocarbon revenues aggregated KWD 10.7 billion (USD 37.3 billion) representing just 6% of revenues. Diversification to increase non-hydrocarbon revenues is essential and should be the country s focus in the medium to long-term by reconsidering the tax system and attracting foreign capital to the country. The imbalance in the government s fiscal policy is a result of the extreme reliance on oil revenues (94% of gov t revenues) along with the massive spending on salaries and subsidies that accounted for around 89% and 56% of total expenditure and revenues, respectively, over the last 8 fiscal years. Capital spending on productive economic sectors and projects and improving the country s infrastructure that averaged around KWD 1.4 bn per year in the last 8 fiscal years is not adequate to develop the economy and sustain economic growth in the long run. 1
Kuwait Nominal GDP KAMCO Research State of Kuwait: Economic & Financial Facts Figures in KWD Million 2005 2006 2007 2008 2009 2010 2011 2012 Nominal GDP 23,593 29,470 32,581 39,620 30,496 34,369 44,323 51,290 Oil GDP 12,233 16,478 17,048 23,508 14,992 18,407 26,896 32,120 Y-O-Y Growth % 56.4% 34.7% 3.5% 37.9% (36.2%) 22.8% 46.1% 19.4% % of GDP 51.8% 55.9% 52.3% 59.3% 49.2% 53.6% 60.7% 62.6% Non-Oil GDP 11,360 12,991 15,533 16,112 15,504 15,963 17,427 19,170 Y-O-Y Growth % 17.2% 14.4% 19.6% 3.7% (3.8%) 3.0% 9.2% 10.0% % of GDP 48% 44% 48% 41% 51% 46% 39% 37% Inflation Rate 4.11% 3.03% 5.53% 10.57% 3.98% 3.97% 4.73% 4.30% 60.0 34.7% Kuwait Nominal GDP (KWD bn) 40.0% 29.0% Y-O-Y Growth 50.0 30.0% 24.9% 51 21.6% 20.0% 40.0 10.6% 12.7% 44 15.7% 10.0% 30.0 33 40 30 29 0.0% 34 20.0 24-10.0% 10.0 - -23.0% 2005 2006 2007 2008 2009 2010 2011 2012-20.0% -30.0% 60.0 50.0 Kuwait Nominal GDP (KWD bn) Oil GDP (KWD bn) Non-Oil GDP (KWD bn) 44 51 40.0 30.0 24 29 33 40 24 30 34 27 32 20.0 10.0 12 11 16 17 13 18 16 16 15 16 16 17 19-2005 2006 2007 2008 2009 2010 2011 2012 Source: Annual Statistical Abstract 2010, CSB, CBK, & KAMCO Research
Population & Per Capita GDP 000 Inhabitants 2005 2006 2007 2008 2009 2010 2011 2012 Total Population 2,991 3,183 3,400 3,442 3,485 3,582 3,697 3,784 Y-O-Y Growth % 8.6% 6.4% 6.8% 1.2% 1.3% 2.8% 3.2% 2.4% Kuwaiti 992 1,023 1,055 1,088 1,119 1,148 1,183 1,204 Y-O-Y % Growth 3.8% 3.1% 3.1% 3.1% 2.9% 2.6% 3.0% 1.8% % of Total Population 33% 32% 31% 32% 32% 32% 32% 32% Non-Kuwaiti 1,999 2,160 2,345 2,354 2,366 2,434 2,514 2,580 Y-O-Y % Growth 11.2% 8.0% 8.6% 0.4% 0.5% 2.9% 3.3% 2.6% % of Total Population 67% 68% 69% 68% 68% 68% 68% 68% Per Capita GDP (KWD) 7,888 9,259 9,584 11,511 8,751 9,595 12,203 13,413 Per Capita GDP (USD) 28,237 33,146 34,309 41,211 31,329 34,349 43,321 46,946 Source: Annual Statistical Abstract 2010, CSB, CBK & KAMCO Research Kuwait Public Finance Figures in KWD Million 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 Oil Revenues 12,955 14,511 17,719 19,878 16,848 19,947 28,570 29,970 % of Total Revenues 94% 94% 93% 94% 94% 93% 94% 94% Non-oil Revenues 773 998 1,303 1,254 1,077 1,555 1,667 2,039 % of Total Revenues 5.6% 6.4% 6.9% 5.9% 6.0% 7.2% 5.5% 6.4% Total Revenues 13,728 15,509 19,023 21,133 17,925 21,502 30,236 32,009 Y-O-Y Growth 13.0% 22.7% 11.1% -15.2% 20.0% 40.6% 5.9% Capital Expenditures 809 1,067 1,296 1,480 1,163 1,841 1,799 1,810 % of Total Expenditures 11.8% 10.3% 13.4% 8.1% 11.9% 11.3% 10.6% 9.4% Current Expenditures 6,053 9,240 8,402 16,782 8,584 14,380 15,209 17,497 % of Total Expenditures 88.2% 89.7% 86.6% 91.9% 88.1% 88.7% 89.4% 90.6% Total Expenditures 6,862 10,306 9,698 18,262 9,747 16,221 17,007 19,308 Y-O-Y Growth 50.2% -5.9% 88.3% -46.6% 66.4% 4.8% 13.5% Primary Surplus/Deficit 6,866 5,203 9,325 2,871 8,178 5,281 13,229 12,701 % of Total Revenues 50.0% 33.5% 49.0% 13.6% 45.6% 24.6% 43.8% 39.7% Transfers to RFFG 1,373 1,551 1,902 2,113 1,793 2,150 3,024 8,002 % of Total Revenues 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 10.0% 25.0% Final Surplus/Deficit 5,493 3,652 7,422 757 6,386 3,131 10,205 4,699 % of GDP 23.3% 12.4% 22.8% 1.9% 20.9% 9.1% 23.0% 9.2%
Kuwait Nominal GDP By Economic Activity Figures in KWD Million 2006 2007 2008 2009 2010 2011 2012 7YR CAGR Oil & Gas 16,518 17,094 23,554 14,992 18,407 26,896 32,120 11.7% Community Services 3,576 4,090 4,742 5,092 5,584 6,473 7,373 12.8% Financial Services 3,272 4,698 4,407 3,471 3,092 2,958 3,197-0.4% Transport, Storage & Comm. 1,614 1,803 1,753 1,562 1,933 2,261 2,757 9.3% Manufacturing 1,937 2,395 2,623 2,741 2,406 2,309 2,422 3.8% Wholesale & Retail Trade 1,263 1,371 1,406 1,413 1,546 1,606 1,691 5.0% Real Estate 1,240 1,277 1,268 1,210 1,156 1,266 1,301 0.8% Construction 534 596 656 583 730 773 811 7.2% Electricity & Water 335 337 363 432 510 610 622 10.9% Business Services 265 332 348 379 402 486 511 11.6% Agriculture & Fishing 70 70 63 80 80 137 145 13.0% Mining 39 47 45 68 77 89 91 14.9% Nominal GDP at PP 30,663 34,108 41,230 32,022 35,922 45,861 53,041 9.6% Source: Annual Statistical Abstract 2010, CSB, CBK & KAMCO Research Average Contribution of Sectors to Kuwait Nomianl GDP (2006-2012) Manufacturing, 6.4% Wholesale & Retail Trade, 3.9% Real Estate, 5.0% Others, 2.4% Transport, Storage & Comm., 5.0% Financial Services, 9.6% Oil & Gas, 54.2% Community Services, 13.5% Source: Annual Statistical Abstract 2010, CSB, CBK, & KAMCO Research
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