Kuwait’s economy to rebound in 2024 with 2.8% growth: World Bank

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Al-Zour refinery boosts Kuwait’s economic outlook with full operation.

KUWAIT CITY, May 30: The World Bank has projected a robust recovery in Kuwait’s economic growth, anticipating a rise to 2.8 percent in 2024. This recovery is attributed to expansionary fiscal policies, increased oil production, and the commencement of full operations at the Al-Zour refinery, which now boasts a refining capacity of 615,000 barrels per day.

In its latest report, the World Bank forecasts a 3.6 percent growth in Kuwait’s oil production, coupled with a 2.1 percent expansion in the non-oil sector for the current year. However, the report notes that relatively high interest rates may curb domestic consumption, thereby limiting the full potential of Kuwait’s economic activity. Additionally, ongoing political uncertainty could delay new infrastructure projects and slow the pace of reform initiatives.

On a broader scale, the World Bank suggests a promising recovery for the Gulf region, with economic growth expected to reach 2.8 percent in 2024 and further accelerate to 4.7 percent in 2025. The optimism is driven not only by an anticipated recovery in oil production, as OPEC+ gradually eases production quotas in the latter half of 2024, but also by the sustained momentum of the non-oil economy, which is projected to expand robustly in the medium term.

The report underscores the strategic importance of Gulf countries’ efforts to diversify their economies, highlighting their commitment to enhancing resilience and achieving sustainable development amidst global economic fluctuations.

For individual Gulf countries, the World Bank has specific projections:

  • Saudi Arabia: Real GDP growth is expected to be 2.5 percent in 2024, primarily driven by strong non-oil private sector activities. With the end of voluntary oil production cuts in Q2 2024 and a gradual increase in production in the second half, overall growth is forecasted at 4.8 percent.
  • United Arab Emirates: Real GDP growth is set to accelerate to 3.9 percent in 2024, bolstered by significant increases in oil production announced by OPEC+ for the latter half of the year and a rebound in global economic activity. Oil production growth is anticipated at 5.8 percent, with non-oil output, particularly in tourism, real estate, construction, transportation, and manufacturing, expected to rise by 3.2 percent.
  • Qatar: Real GDP growth is projected to rise marginally to 2.1 percent in 2024, with the non-oil sector expected to grow by 2.4 percent, driven by the tourism sector.
  • Bahrain: Economic prospects are closely tied to oil market trends and the pace of structural reforms. Growth is expected to increase to 3.5 percent in 2024, with oil production rising and the non-oil sector remaining a key growth driver.
  • Oman: The outlook remains positive, with real growth forecasted at 1.5 percent in 2024, supported by increased gas production and ongoing efforts to diversify economic activities and improve the business environment.

Overall, the World Bank’s report presents an optimistic view of the Gulf region’s economic future, emphasizing the critical role of both oil and non-oil sectors in driving growth and development.

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