Kuwait’s KD 3.1 bln push builds economic resilience

KUWAIT CITY, Aug 5: The Ministry of Finance has transformed accounting figures into a developmental shield, strengthening the economic system against ongoing geopolitical challenges. This was achieved by increasing the budget allocated for construction and infrastructure projects in the 2026/2027 fiscal year budget to KD 3.1 billion, up from KD 2.24 billion in the previous fiscal year. In this regard, former advisor to the Ministry of Finance and economic expert Mohammed Ramadan told the daily that the increase in capital expenditures allocated to construction and infrastructure projects in the 2026/2027 budget played a significant role in enhancing Boursa Kuwait's resilience to geopolitical challenges.

He pointed out that the increase of approximately 860 million dinars over last year’s budget dispelled deflationary concerns and marked a new phase of structural economic hedging, capable of addressing regional instability by strengthening the state’s operational assets. Ramadan noted that the Ministry of Finance has succeeded in increasing capital spending, which has revitalized the operational activities of listed companies and banks. He stressed that the growing volume of projects will encourage companies to borrow from banks, thereby supporting economic growth and positively impacting Boursa Kuwait. Meanwhile, economic expert Ahmed Al-Hajri stated that accelerating the implementation of major development projects represents the first line of defense for monetary stability

He explained that these positive effects are reflected in the performance of Kuwait’s stock market through five strategic axes. The first involves strengthening investor and institutional confidence, as increased capital spending sends strong and reassuring signals to local and global financial markets. The second axis focuses on injecting liquidity, stimulating trading activity, and attracting new government contracts and projects, which revitalizes the flow of money within the economy.

This is directly reflected in a significant increase in daily cash trading volumes, boosting market activity and supporting stock values. The third axis focuses on enhancing capital flows, which helps maximize the profitability of listed companies. The fourth axis focuses on stimulating credit activity and revitalizing the banking sector. The banking sector represents the largest component and carries the highest relative weight in Boursa Kuwait indices. Its impact is reflected through the growing demand for financing from companies implementing government projects, which supports the stability of the overall stock market index. The fifth axis focuses on attracting foreign capital and investment through the financial stability generated by government spending. This enhances the attractiveness of the Kuwaiti market to global funds as a safe investment destination. This advantage strengthens Boursa Kuwait’s position as a stable investment destination amid a turbulent regional environment.

By Najeh Bilal Al-Seyassah/Arab Times Staff