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CBK reports on recent IMF mission
KUWAIT CITY, Dec 22, (KUNA): The International Monetary Fund (IMF) predicted a projected increase in Kuwait’s GDP above eight percent in 2022, said Central Bank of Kuwait (CBK) on Thursday. The CBK indicated that this projection came following the recent visit by the IMF mission, led by Yasser Abdih, to Kuwait on December 11-18, 2022. According to a statement by Abdih, the IMF predicted that “Overall real GDP growth is estimated to have rebounded from -8.9 percent in 2020 to 1.3 percent in 2021. It is projected to further increase to above 8 percent in 2022, supported by increased oil production, high oil prices, and sustained improvement in domestic demand.” The CBK affirmed that it would coordinate between the IMF and local entities to achieve the points mentioned in the conclusion of the recent visit to Kuwait.
The IMF commended “Kuwait’s economic recovery”, due to the “strong vaccination efforts and the authorities’ swift and decisive responses to the COVID- 19 crisis,” which allowed for “the relaxation of all social distancing restrictions and supported economic recovery.” “Overall real GDP growth is estimated to have rebounded from -8.9 percent in 2020 to 1.3 percent in 2021. It is projected to further increase to above 8 percent in 2022, supported by increased oil production, high oil prices, and sustained improvement in domestic demand,” the IMF was quoted by the CBK statement as saying. The IMF went on to say that “In 2023, growth is likely to moderate, reflecting slowing external demand and oil production cuts under the OPEC+ agreement.”
“Inflation has been contained, benefiting from monetary tightening and limited passthrough from higher global food and energy prices supported by administered prices and subsidies. With higher oil prices and output, the overall fiscal and current account surpluses increased significantly from last year,” it said.
“With strong bank buffers and prudent oversight and proactive monitoring of financial risks by Central Bank of Kuwait, the banking system has weathered the recent shocks well. Banks continue to be well-capitalized and liquid, financial soundness indicators are healthy, and private sector credit growth remains strong,” it added.
“The authorities continue to implement measures to improve fiscal revenue collection and spending efficiency. Efforts are ongoing to promote digital transformation, advance financial technology, and invest in green energy,” it said. “Nevertheless, the outlook is subject to uncertainties and risks surrounding the external environment, including potential impacts of monetary policy tightening in major advanced economies and further slowdown in global economic activity,” it said.
“And volatility in oil prices and production, stemming from external factors including the geopolitical environment, could weigh on activity and macroeconomic balances. Delays in key fiscal and structural reforms could amplify the risk of procyclical fiscal policies, and hinder progress toward more economic diversification and higher competitiveness,” it concluded