Kuwait: 2020 Article IV Consultation-Press Release; Staff Report; and Staff Supplement

IMF Staff Country Reports, March 30, 2020

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Canonical URL: Kuwait: 2020 Article IV Consultation-Press Release; Staff Report; and Staff Supplement

Non-oil growth strengthened to estimated 3 percent in 2019, propelled by government and consumer spending.
The subdued forecast for oil revenues is weighing on near-term growth and fiscal and external balances.
Sustaining reforms to foster private sector-led and diversified growth will be critical given limited scope for public employment going forward.

The challenge to reduce dependence on oil and boost savings has become more urgent.
Embedding fiscal measures in a comprehensive reform package that promotes private sector growth, strengthens governance and accountability, and improves public services would help build broad support for reforms.
A rules-based fiscal framework would improve management of oil revenues.
A rule-based framework would help anchor fiscal policy on a long-term objective of intergenerational equity.
The framework should include a well-calibrated operational rule that helps reconcile long-term savings and near-term economic stabilization objectives.

Financial sector reforms should focus on bolstering resilience and deepening inclusion.

With limited scope for public employment going forward, a vibrant private sector must emerge to absorb the large number of Kuwaitis entering the labor market in coming years.
Policies to promote private sector growth and diversification are emphasized as essential to long-term stability and employment.

Source: Kuwait: 2020 Article IV Consultation-Press Release; Staff Report; and Staff Supplement.