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Tuesday , October 4 2022

Kuwait economy on road to recovery; KD 2.5b loans given in 5 mths

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KUWAIT CITY, July 7: The credit granted by the Kuwaiti banking sector continued its growth during last May, bringing all types of loans granted to all economic sectors to about 2.5 billion dinars within the first five months of 2022 reaching a new record level at 44.8 billion dinars at the end of last May, reports Al- Anba daily. On a monthly level, the credit granted by Kuwaiti banks increased during last May by 1.6 percent, with a value of 722 million dinars, compared to last April, which reached the level of credit at the end of 44.1 billion dinars.

This rise coincides with the clear recovery of the Kuwaiti economy since the beginning of this year, supported by the rise in oil prices to record levels and the gradual improvement in the pace of consumer spending. The increase in consumer loans granted to purchase durable goods and cars continued for the fourth consecutive month, recording a monthly increase of 0.75%, with a value of 14 thousand dinars during last May, to reach 1.86 billion dinars, compared to 1.85 billion dinars in last April.

While the installment loans granted to Kuwaitis for the purpose of renovation or buying private housing increased by 1% during last May to record 14.99 billion dinars, compared to 14.84 billion dinars at the end of last April, and recorded strong annual growth of 13.9% compared to levels in May last year of 13,160 billion dinars.

Moreover, the credit growth was enhanced with the increase in the growth of loans directed to the purchase of securities, with a monthly increase of 13.5% to record a level of 3.509 billion dinars during last May, compared to 3.091 billion dinars in last April, and also recorded an annual increase of 38.97% compared to its levels in May of last year amounting to 2.525 billion dinars. The oil and gas sector witnessed a monthly increase of 1.14% to record the level of 2.293 billion dinars during last May, compared to 2.267 billion dinars during last April. While it recorded an annual increase of 15.86% compared to the levels in May of last year, which amounted to 1.979 billion dinars. With the return of economic activity to before the Corona pandemic and the increase in Kuwait’s oil production according to the agreed quotas and the continuous increase in oil prices, it is expected that credit will continue to receive more support during the coming period, in addition to an increase in the growth of the non-oil economy of Kuwait at a strong pace.

Turning to the banking sector deposits, we find that they witnessed an increase during the month of May by 0.65%, reaching the level of 47 billion dinars, up from the level of 46.69 billion dinars that was achieved during the month of April. This rise is due to the wise policy of the Central Bank of Kuwait to raise interest rates in conjunction with the decisions of the Federal Reserve in the past period. The government raised 77 million dinars of its deposits last May, bringing the total government deposits in the banking system to 7.178 billion dinars, with a monthly increase of 1.08% compared to 7.101 at the end of last April.

On an annual basis, it rose by 1.22% compared to its levels in May of last year, which amounted to 7.091 billion dinars. Thus, the government has pumped 87 million dinars from its balances within a year. At the level of the private sector, deposits in Kuwaiti dinars rose by 0.56% per month during the month of May, to reach 37.150 billion dinars at the end of the month, after the private sector pumped 210 million dinars of deposits in Kuwaiti dinars.

The private sector’s deposits in dinars increased annually, amounting to 2.564 billion dinars, compared to levels in May of last year, which amounted to 34.586 billion dinars, at a rate of 7.41%. The Central Bank data showed that Kuwait’s reserve assets rose to 15.04 billion dinars at the end of last May, with a monthly growth of 4.3% from its level of 14.41 billion dinars last April.

The country’s reserves included about 13.39 billion dinars, the balance of deposits and foreign currencies abroad, in addition to about 1.33 One billion dinars special drawing rights of Kuwait with the International Monetary Fund. It also consists of about 234.2 million dinars in balance with the International Monetary Fund. Kuwait’s foreign reserve includes gold (amounting to 79 tons calculated at book value since its purchase) at about 31.7 million dinars by the end of May 2022, knowing that the foreign reserve does not include the foreign assets of the General Investment Authority represented by the sovereign fund.

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