## IMF Staff Concludes Staff Visit to Kuwait

_IMF News, December 22, 2022_

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## Bibliographic details
- Published: December 22, 2022

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### Mission context and timing
- Press Release No. 22/454
- Mission led by Mr. Yasser Abdih
- Discussions held in Kuwait City during December 11-18, 2022
- Statement issued at mission conclusion on December 22, 2022
- Views are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board; this mission will not result in a Board discussion

### Recent economic performance and outlook
- Overall real GDP growth:
  - Rebounded from -8.9 percent in 2020 to 1.3 percent in 2021
  - Projected to increase to above 8 percent in 2022, supported by increased oil production, high oil prices, and sustained improvement in domestic demand
  - In 2023, growth is likely to moderate, reflecting slowing external demand and oil production cuts under the OPEC+ agreement
- Fiscal and external balances:
  - Supported by high oil output and prices, Kuwait’s economic recovery is carrying on and fiscal and external balances are improving
  - With higher oil prices and output, the overall fiscal and current account surpluses increased significantly from last year
- Inflation and monetary conditions:
  - Inflation has been contained so far, supported by monetary policy tightening and energy and food subsidies
  - Limited passthrough from higher global food and energy prices due to administered prices and subsidies

### Financial sector resilience
- Banking system:
  - Banks remain well-capitalized and liquid
  - Strong bank buffers and prudent oversight and proactive monitoring of financial risks by Central Bank of Kuwait have helped the system weather recent shocks
  - Financial soundness indicators are healthy, and private sector credit growth remains strong

### Policy actions and reform efforts
- Fiscal measures:
  - Authorities continue to implement measures to improve fiscal revenue collection and spending efficiency
- Structural and strategic initiatives:
  - Ongoing efforts to promote digital transformation, advance financial technology, and invest in green energy

### Risks and uncertainties
- External environment risks:
  - Potential repercussions from the global economic slowdown and externally-induced volatility in oil prices and output
  - Possible impacts of monetary policy tightening in major advanced economies and further slowdown in global economic activity
- Geopolitical and commodity risks:
  - Volatility in oil prices and production, stemming from external factors including the geopolitical environment, could weigh on activity and macroeconomic balances
  - Direct adverse spillovers from the Russia’s war in Ukraine have been contained so far given the limited trade and financial linkages with both countries
- Domestic reform risks:
  - Delays in key fiscal and structural reforms could amplify the risk of procyclical fiscal policies, and hinder progress toward more economic diversification and higher competitiveness

### IMF team closing remarks
- The IMF mission team expressed appreciation to the authorities for their hospitality and the candid and productive discussions and looks forward to continuing dialogue and close collaboration

*IMF staff statement, December 22, 2022.*

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## References

- [Kuwait and the IMF](http://www.imf.org/external/country/KWT/index.htm)
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- [PRESS CENTER](http://presscenter.imf.org/)
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_Source: https://www.imf.org/en/news/articles/2022/12/21/pr22454-kuwait-imf-staff-concludes-staff-visit-to-kuwait_