Kuwait Economics Growth Is Lowest

In a recent report released by the World Bank on Wednesday, the World Bank predicted Kuwait's economic growth in 2023 would slow to 1.3 percent due to the cautious approach adopted by the "OPEC Plus" to production and the slowdown in global economic activity. According to the Al-Rai daily, despite the recent operation of the Al-Zour refinery, the oil sector is expected to contract by 2.2 percent this year. The bank also expected the growth of the non-oil sectors in Kuwait to slow down by 4.4 percent this year, attributing the reason in the first place to private consumption, and that the uncertainty regarding policies resulting from the political stalemate leads to undermining the implementation of new infrastructure projects. It was suggested by the World Bank that the inflation rate in Kuwait this year would decrease to 2.6 percent, from 4.3 percent last year, as well as the surplus on the current account of about 22 percent of the gross domestic product, down from 26 percent in 2022, in its report on the latest economic developments in the Gulf region.

According to the report, Gulf economies will grow at a slower pace in 2023 due to lower oil and gas revenues and a slowdown in global economic activity. Kuwait has the lowest economic growth among the GCC countries this year, and it recorded the third highest growth in the non-oil sectors after the UAE (4.8 percent) and Saudi Arabia (4.7 percent). The report predicted that the economy of the Gulf countries would grow at a rate of 2.5 percent in 2023 and 3.2 percent in 2024. This comes in comparison with the remarkable growth of the region’s gross domestic product, which amounted to 7.3 percent in 2022, due to the strong increase in oil production for most of this year. The reason for the poor performance is primarily due to the decline in the hydrocarbon gross domestic product, which is expected to contract by 1.3 percent by 2023 after the announcement of the production cut in “OPEC Plus” last April and the global economic slowdown, but the strong growth in the non-oil sectors, which It is expected to reach 4.6 percent by 2023, which will reduce deficiencies in hydrocarbon activities. Based on relatively higher oil revenues in 2023, the World Bank attributed the increase to private consumption, fixed investments, and easing of fiscal policies.

The report indicated that the structural reforms undertaken in the past few years have supported very modest growth rates this year. The improvement of the business climate and competitiveness, and general improvements in the participation of women in the labor force in the Gulf countries, especially Saudi Arabia, has led to achieving the desired returns, although more efforts must be made to achieve the desired diversity. On the other hand, the World Bank report focused on the issue of how non-communicable diseases became the main cause of death and disease, pointing out that they are the cause of nearly 75 percent of all deaths and disabilities in the region. More than 80 percent of the aforementioned deaths and disability cases are caused by only four non-communicable diseases: cardiovascular diseases, diabetes, cancer, and respiratory diseases.

The World Bank and key stakeholders from Gulf countries collaborated to estimate the direct medical costs of seven major non-communicable diseases at $16.7 billion in 2019. This same study found that non-communicable diseases also impose significant indirect costs on these countries' economies, through a negative impact on human capital.

In 2019, labor force productivity losses alone cost Gulf economies more than $80 billion. With population aging and non-communicable diseases prevalent, these costs are expected to increase in the future rather than decline. The World Bank's Regional Director for Gulf Cooperation Council Countries, Issam Abu Suleiman, said: "Many GCC countries have already taken strong measures to address the risk factors mentioned above, such as taxes on tobacco products, smoke and sugary drinks, as well as restrictions or bans on tobacco and smoke advertising, promotion, and sponsorship, and a reduction of salt content in foods. Gulf states have also set environmental targets. In the future, there is an opportunity to reduce non-communicable diseases and their costs."

 

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