Entries for 'Kuwait'

The short-term macroeconomic outlook remains favorable, supported by elevated oil prices. Structural reforms are needed to help diversify the economy.

Investor sentiment towards oil exporters in the region will remain favorable due to elevated energy prices. Total capital inflows will remain modest in 2023, as sovereigns’ issue less debt due to continued fiscal surpluses. FDI will become the main conduit for nonresident capital inflows.

Sanctions on Russia combined with supply shortages elsewhere may keep oil prices elevated despite lower global demand. Higher global oil supply combined with weaker demand growth could stabilize the oil market in H2 2022 and in 2023

The MENA region has weathered the economic storm from the health crisis. The economic recovery continues to gain momentum. Higher energy prices will improve the fiscal and current account positions in oil exporters. In oil importers, deficits, government debt, and unemployment will remain high. 

GCC authorities took forceful steps to mitigate the fallout from COVID-19, and we expect a modest recovery in 2021 supported by higher oil prices. However, the region confronts an ongoing exodus of expats and decelerating growth of capital stock, underscoring the need for broad structural reforms.

Sovereigns are increasingly tapping capital markets to finance fiscal deficits. Private inflows to the MENA region continue to be dominated by Saudi Arabia, the UAE and Qatar. Resident outflows are declining but still exceed inflows. FDI remains subdued and concentrated in the energy sector. 

Our MENA growth forecast stands at -0.3% with additional downside risks and high uncertainty over the duration of the shutdown and an additional potential fall on oil prices. We project recession in most oil exporters, the lowest growth in oil importers since the early 1990s, and wide twin deficits. 

We have lowered our average Brent oil price assumption by $10/bbl to $54/bbl for 2020 due to lower global demand for oil. Such a decline exposes significant vulnerabilities among MENA oil-exporting countries, especially Oman and Bahrain. External and fiscal positions are expected to weaken.

The extra 0.5 mbd cut may not be enough to rein in projected oversupply in 2020, since the OPEC+ bloc has already made cuts well beyond the 1.2 mbd target of the previous agreement. Consequently, we expect a decline in average Brent oil prices to $60 a barrel in 2020.

Non-resident capital inflows to the MENA region are projected to rise from $165bn last year to $200bn in 2019 before moderating to $173bn in 2020. With the increasing inflows, inclusion into global indices, and ongoing reforms, the MENA region is becoming more prominent on the EM investment map. 
 

We expect growth in the MENA region to slow to 1.4% in 2019 from 1.8% in 2018, dragged down by the deep recession in Iran and the compliance with the OPEC + deal. This aggregate picture, however, hides considerable heterogeneity in economic paths across the region.

We still expect Brent oil prices to average $65/b in 2019 and $62/b in 2020. Growth in non-OPEC supply combined with deceleration in global oil demand growth in 2019 and 2020, is offsetting upward pressure on oil prices from rising geopolitical tensions that could disrupt supply.

The GCC countries followed the Fed and cut their key policy rates, given their pegged exchange rates. Lower interest rates will encourage borrowing and stimulate non-oil growth, which has been weak in recent years. We expect non-oil growth to pick up from 2.1% in 2018 to 2.8% in 2019. 
 

Addition to the MSCI EM Index would acknowledge capital markets reform and send a positive signal to investors. We expect foreign inflows of $1.8 billion from passive investors and up to $7 billion from active investors in 2020-2022.

Non-oil economic growth is improving with stronger consumer confidence and a healthy project pipeline. The fiscal deficit, excluding investment income

Kuwait is well placed to withstand low oil prices given its low debt and enormous financial buffers, which allow the authorities to pursue gradual fis

The financial sector is in a strong position to weather challenges of lower oil prices.' Further deceleration in deposits could curtail credit growth

Discussions during our recent visit to Kuwait highlighted improvement in the implementation of the five-year development plan and gradual fiscal conso

Growth in nonoil economic activity is improving modestly after a period during which Kuwait has lagged behind peers as the implementation of the 2010-

Kuwait continues to generate record fiscal and current account surpluses, driven by the hydrocarbon sector. This in turn has led to larger increases i