## Kuwait: 2001 Article IV Consultation—Staff Report; and Public Information Notice on the Executive Board Consideration

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**Canonical URL:** [Kuwait: 2001 Article IV Consultation—Staff Report; and Public Information Notice on the Executive Board Consideration](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2001/_cr01103.pdf)

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### Publication and context
- Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year.
- Documents released in this package:
  - the staff report for the 2001 Article IV consultation, prepared by a staff team following discussions that ended on April 11, 2001; the staff report was completed on June 11, 2001. (Note: Page 9, Box 1, has been corrected in this printing of the report.)
  - a Public Information Notice (PIN) summarizing the views of the Executive Board of June 27, 2001 in considering the staff report.
- Copies available from International Monetary Fund • Publication Services; Price: $15.00 a copy.

### Banking sector indicators (Box 1)
- Source: Central Bank of Kuwait; and Fund staff estimates.
- Banks’ capital-asset ratio:
  - 1997: 11.4
  - 1998: 12.1
  - 1999: 12.7
  - 2000: 12.0
- Banks risk-weighted capital-asset ratio:
  - 1997: 22.4
  - 1998: 22.5
  - 1999: 23.7
  - 2000: 22.4
- Ratio of banks’ nonperforming loans to total loans:
  - 1997: 10.2
  - 1998: 9.9
  - 1999: 12.8
  - 2000: 12.7
- Nonperforming loans from before invasion:
  - 1997: 8.2
  - 1998: 7.3
  - 1999: 6.8
  - 2000: 6.4
- Nonperforming loans since liberation:
  - 1997: 2.0
  - 1998: 2.6
  - 1999: 6.0
  - 2000: 6.3
- Loan provisions as a proportion of nonperforming loans:
  - 1997: 62.9
  - 1998: 68.2
  - 1999: 53.0
  - 2000: 49.0
- Banks’ interest rate spread1/ (difference between weighted average lending and deposit rates on KD loans and deposits):
  - 1997: 2.4
  - 1998: 2.4
  - 1999: 2.9
  - 2000: 2.7

### Financial markets and regulatory measures
- The Kuwait Stock Exchange (KSE) recovered during the first quarter of 2001.
- The mission welcomed:
  - the opening of the stock exchange to foreign investors;
  - the strengthening of regulations regarding disclosure and insider trading.
- The mission encouraged the authorities to further facilitate foreign investor participation by:
  - expediting the revision of the income tax law;
  - reforming the company law;
  - further strengthening supervision and the enforcement of regulations.

### Structural reform progress and recommendations
- Structural reform advances since late 2000:
  - National Assembly passed key elements of the reform package:
    - laws on foreign portfolio investment (September 2000);
    - foreign direct investment (March 2001);
    - key components of the labor market reform (May 2000).
  - Additional measures not requiring legislative approval are being introduced, such as increases in fees and charges on government-provided services.
  - Other initiatives expected to be approved by the National Assembly by end-2001 include the privatization law, the reform of the corporate income tax law, and the company law.
  - A recently appointed Committee for Economic Reform has helped expedite preparatory work and build broader support for the proposed reform package.
- Mission encouragements and policy recommendations:
  - rapidly put in place the implementing regulations for enacted laws;
  - provide needed technical support to implement reforms;
  - capitalize on the synergy created by the Committee for Economic Reform to expedite implementation.

*International Monetary Fund. Kuwait: 2001 Article IV Consultation—Staff Report; and Public Information Notice on the Executive Board Consideration. January 29, 2001; corrected August 2001. (IMF Country Report No. 01/103).*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2001/_cr01103.pdf_