Kuwait’s economy will recover in 2022

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Travel restrictions and imposing curfews will slow growth and profitability

KUWAIT CITY, Sept 24: The international credit rating agency, Standard & Poor’s (S&P), said that the rating risks related to the Kuwaiti economy is that Kuwait is completely dependent on oil revenue which is 90% of its exports.

The prospects of the oil industry have been weak significantly due to the corona pandemic subsequently there has been a sharp drop in travel industry.  Oil industry has played a major role in Kuwait’s economic performance.

The impact of the epidemic on the oil industry will have a direct impact on the wider Kuwaiti economy, similar to the situation in most other countries of the world during the current year.

Basic economic expectations focus on a decline in Kuwait’s GDP by 7% this year, and it is not expected to recover next year because we estimate that the rate of economic growth in it will be zero, and this is largely due to the production cuts agreed upon 

Standard & Poor’s expected the recovery of the Kuwaiti economy to gather momentum from 2022, in addition to real GDP growth on average to reach 7% during 2022 and 2023.  

The agency pointed out that the per capita share of GDP decreased from 28.6 thousand dollars during the past year to 22,000 dollars in 2020, to rise again to 25.7 thousand dollars during 2021. With regard to the inflation index, the agency expected it to decline to 1% during the current year, and then rise to 1.5% in 2021. 

On the other hand, the agency said that the prospects for growth in the Kuwaiti insurance sector are positive in the medium term, as the Kuwaiti insurance market is among the fastest growing insurance markets in the region, but the measures taken to contain the “Covid-19” pandemic, including restricting travel movement Imposing curfews will likely slow premium growth and profitability this year.

The agency evaluated the insurance sector of Kuwait at a medium level, indicating that the general and health insurance sector in the country will remain profitable in general, supported by the relatively low risks of products, as most local insurance companies maintain to a large extent their business in the activities of vehicle and medical insurance reports Al Anba. The volume of claims settlements for these activities can be estimated. The more complex risks are generally distributed to the local and international reinsurance markets.

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