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KUWAIT CITY, Aug 5, (Agencies): Kuwait will most likely implement the Value Added Tax (VAT) this year or next year, says the latest World Bank report on the economies of the member-nations of the Gulf Cooperation Council (GCC). The World Bank also predicted that the economy of Kuwait will increase by 2.4 percent within 2021; followed by a projected 3.2 percent growth in the next two years — 2022 and 2023.
It presented projections for Kuwait on the following economic indicators:
■ Real Gross Domestic Product (GDP), percent change: 2.4 in 2021, 3.6 in 2022 and 2.8 in 2023
■ CPI inflation rate, percent average: 2.0 in 2021, 2.3 in 2022 and 2.5 in 2023
■ Government Revenues, percent GDP: 29.8 in 2021, 31.7 in 2022 and 42.1 in 2023
■ Government Expenditures, percent GDP: 52.5 in 2021, 51.0 in 2022 and 50.4 in 2023
■ Fiscal Balance, percent GDP: -22.6 in 2021, -19.3 in 2022 and -8.3 in 2023
■ General Government Gross Debt, percent GDP: 13.7 in 2021, 27.3 in 2022 and 44.1 in 2023
According to the report, the oil exports and local gas consumption will continue to be the driving forces behind the economic growth of Kuwait as the country still relies on oil as its main source of income. As part of measures taken in view of the corona pandemic, the GCC countries provided unemployment insurance; while five of them included health insurance in their support measures, that is, except Kuwait.
These measures somehow mitigated the dire consequences of shortened work hours and closures in a bid to curb the spread of corona. Closures, curfew and lockdowns in the GCC were equated to the loss of 3.3 million full-time jobs, with Kuwait and Oman going beyond the international average of working hour losses — equal to more than 400,000 full-time job losses in 2020.
The World Bank expects the economies of GCC countries to start recovering this year, based on the expected international economic recovery and increase in demand for oil. Also, budget deficits will probably continue in most countries. However; Kuwait, Bahrain and Oman which recorded the biggest deficits last year will continue to be in deficit in 2021 to 2023, but the percentage will be lower than in 2020.