KUWAIT’S SOVEREIGN FUND BOASTS ASSET VALUE OF $ 803bn

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Significant gain in investment income

KUWAIT CITY, Aug 21: Net investment income soared to 2.38 billion dinars, marking the highest three-month investment gain the nation has achieved in recent years. This is a notable surge in returns from its overseas investments during the initial quarter of this year, a substantial growth when compared to the final quarter of 2022, reports Al-Anba daily. This positive performance can be attributed to a range of factors, prominently including the expansion of the financial portfolio, strong outcomes from direct investments, and the augmentation of assets across diverse business sectors. To provide context, Kuwait had attained around 2.3 billion dinars of investment income during the preceding quarter.

This growth in investment income has played a significant role in bolstering the trade balance, which achieved a surplus of 603 million dinars during the initial quarter of this year. During the ongoing period, Kuwait’s current account exhibited a surplus of 4.1 billion dinars, with the goods and services account contributing 3 billion dinars. The value of commodity exports reached 6.6 billion dinars, with oil exports constituting a majority at 6.18 billion dinars, while imports amounted to approximately two billion dinars. The data points towards an encouraging trajectory for the current account, underpinned by rising oil prices, increased production, and the stable flow of Kuwaiti investment revenues from abroad. These factors together contribute to the observed surplus.

Looking ahead, the medium-term outlook might be impacted by potential declines in oil prices, reduced output shares, and a forecasted slowdown in global economic growth. Ongoing challenges persist due to uncertainties linked to the global economy, including inflation trends, monetary policy adjustments, and geopolitical crises such as the Russian-Ukrainian situation. In terms of the balance of payments for the first quarter, net direct investments reached 705.2 million dinars, while the net value of financial portfolio investments stood at 1.15 billion dinars, and other investments amounted to 749.2 million dinars.

Kuwait Investment Authority sovereign fund, which ranks second globally, possesses assets valued at approximately $803 billion. The fund’s annual returns are estimated to be around 3%, with alternative investments constituting 15% of the portfolio. In the broader context, Kuwait’s external position has significantly improved due to recovering oil prices, and this positive trend is expected to persist throughout the remainder of 2023. Meanwhile, remittances from expatriates in Kuwait witnessed consistent growth during the first quarter of 2023, with total remittances amounting to 1.22 billion dinars, in contrast to 1.16 billion dinars during the final quarter of 2022.

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