## IMF Executive Board Concludes 2025 Article IV Consultation with Kuwait _IMF News, February 24, 2026_ ## Source details **Canonical URL:** [IMF Executive Board Concludes 2025 Article IV Consultation with Kuwait](https://www.imf.org/en/news/articles/2026/02/23/pr-26061-kuwait-imf-executive-board-concludes-2025-article-iv-consultation) ## Other formats - [Markdown version](/en/news/articles/2026/02/23/pr-26061-kuwait-imf-executive-board-concludes-2025-article-iv-consultation/index.md) - [Structured JSON version](/en/news/articles/2026/02/23/pr-26061-kuwait-imf-executive-board-concludes-2025-article-iv-consultation/index.json) - [Bundle manifest](/en/news/articles/2026/02/23/pr-26061-kuwait-imf-executive-board-concludes-2025-article-iv-consultation/bundle-manifest.json) ## Bibliographic details - Published: February 24, 2026 --- ### Economic developments (recent) - Real GDP expanded by 1.7 percent (y-o-y) in 2025Q2, driven by non-oil growth of 3.1 percent (y-o-y). - Headline inflation reached 2.4 percent (y-o-y) in November 2025. - Current account surplus estimated at 23.6 percent of GDP in 2025. - External buffers remain large; the financial system remains stable and prudently managed. - Lower oil prices and production have weakened external and fiscal positions despite improvements in the fiscal position. ### Outlook and projections - Real GDP growth: - 2026: 3.8 percent - Medium term: growth expected to remain robust - Non-oil growth: - 2026 estimate: 3.0 percent of GDP - Inflation: - Headline CPI: 2.1 percent in 2026, stabilizing just below 2.0 percent over the medium term - Fiscal balances: - Fiscal deficit of the budgetary central government: 8.7 percent of GDP in FY2025/26; 9.4 percent of GDP in FY2026/27; then widening over the medium term - External balances: - Current account surplus: 19.6 percent of GDP in 2026; gradual decline over the medium term - Risks: described as broadly balanced, with primary exposures to commodity price volatility, global growth changes, shifts in global financial conditions, and domestic reform speed and infrastructure project implementation ### Executive Board assessment (summary) - Recovery is underway despite lower oil prices; rebound driven by unwinding of OPEC+ production cuts and robust non-oil growth. - Inflation moderating due to lower core and food inflation. - Lower oil revenues have weakened external and fiscal positions; buffers remain strong. - Financial stability maintained with a credit cycle upturn underway. - Heavy dependence on oil implies main risks stem from oil-price and OPEC+ production developments. - Staff welcomes Vision 2035 aspirations; stresses need for a comprehensive, well-sequenced fiscal and structural reform package to boost non-oil growth sustainably. ### Fiscal policy recommendations - Gradual fiscal consolidation at a pace of about 1 percent of GDP per year over the next decade to achieve long-term fiscal sustainability. - Mobilize non-oil revenue: - Extend the 15 percent CIT to all domestic companies. - Introduce the GCC-wide excise tax. - Introduce a 5 percent VAT. - Rationalize public sector wage bill: - Introduce a performance-based public sector wage setting mechanism to gradually reduce the large premium over the private sector. - Institute a hiring cap to steadily lower the public sector employment share. - Reform energy subsidies: - Gradually raise retail fuel, electricity and water prices towards their GCC-average levels. - Provide targeted cash transfers to vulnerable groups. - Scale up on-budget public investment by around 2 percent of GDP over the medium term. ### Public financial management and debt recommendations - Implement comprehensive PFM reforms to strengthen fiscal policy conduct. - Develop a medium-term fiscal framework, including a fiscal rules framework with: - A ceiling on public debt. - A target for the non-oil fiscal balance. - Undertake periodic public investment management assessments to ensure infrastructure governance and track contingent liabilities. - Publish a medium-term debt management strategy including a bond issuance calendar. - Develop a sovereign asset-liability management framework to balance intergenerational fiscal policy tradeoffs and manage public sector balance sheet risks. ### Monetary policy and external position - The exchange rate peg remains an appropriate nominal anchor for monetary policy; it has supported macroeconomic and financial stability and relatively low and stable inflation. - The external position in 2025 was substantially weaker than implied by medium-term fundamentals and desirable policies, reflecting excessive reliance on oil exports and inadequate public and private saving of oil revenue. - Fiscal consolidation and structural reforms are needed to strengthen the external position and support the exchange rate peg. ### Financial sector and macroprudential policy - Systemic risk remains contained and prudently managed. - With a credit cycle upturn, the CBK should consider reclassifying part of its country-specific capital buffer as a positive neutral countercyclical capital buffer. - The forthcoming Real Estate Financing Law will permit banks to offer mortgage loans for the first time; the CBK should: - Continue regularly reviewing the adequacy of its financial regulatory perimeter. - Maintain its extensive macroprudential policy toolkit. - Continue a risk-based supervisory approach to assessing banks and addressing vulnerabilities. ### Structural reform priorities - Implement a comprehensive, well-sequenced structural reform package to unify the labor market and improve the business environment. - Priorities include: - Reducing the public sector wage premium. - Scaling up the supply of housing. - Deepening financial markets. - Note: The state owns most productive assets, employs nearly all Kuwaitis, and leads all megaprojects. ### Statistics and surveillance - Statistical capacity has weakened further from a low base, hampering surveillance. - Major gaps in the national accounts, government finance and external sector statistics should be filled to enable well-informed policymaking. ### Key selected economic indicators (2023–2027; projections) - Output and prices (Percent change) - Real GDP: 2023: -1.7; 2024: -2.6; 2025: 2.6; 2026: 3.8; 2027: 2.5 - Oil: 2023: -4.2; 2024: -6.9; 2025: 2.4; 2026: 4.7; 2027: 2.0 - Non-oil: 2023: 1.0; 2024: 1.8; 2025: 2.7; 2026: 3.0; 2027: (not listed) - CPI inflation (average): 2023: 3.6; 2024: 2.9; 2025: 2.3; 2026: 2.1; 2027: (not listed) - Core 1/: 2023: 3.1; 2024: 1.7; 2025: 1.9; 2026: (not listed) - External sector (Percent of GDP, unless noted otherwise) - Current account balance: 2023: 31.1; 2024: 29.1; 2025: 23.6; 2026: 19.6; 2027: 18.1 - Official reserve assets (months of imports): 2023: 9.3; 2024: 8.1; 2025: 7.0; 2026: 7.1; 2027: 7.2 - Gross external debt: 2023: 39.0; 2024: 41.3; 2025: 37.1; 2026: 43.4; 2027: 46.0 - Government finance 2/ (Percent of GDP) - Revenue 3/: 2023: 76.6; 2024: 74.4; 2025: 77.6; 2026: 76.1; 2027: 75.4 - Oil 3/: 2023: 71.7; 2024: 68.4; 2025: 70.9; 2026: 68.9; 2027: 68.1 - (Unlabeled row) 2023: 4.8; 2024: 5.9; 2025: 6.7; 2026: 7.4; 2027: (not listed) - Expenditure 4/: 2023: 48.3; 2024: 48.2; 2025: 50.5; 2026: 51.1; 2027: 51.0 - Net lending (+) / borrowing (-) 3/ 4/: 2023: 28.2; 2024: 26.1; 2025: 27.1; 2026: 25.0; 2027: 24.4 - Budgetary central government: 2023: 0.9; 2024: -2.4; 2025: -7.1; 2026: -9.3; 2027: -9.8 - Gross government debt: 2023: 14.7; 2024: 24.2; 2025: 28.9; 2026: (not listed) - Money and credit - Credit to nonfinancial private sector: 2023: 5.2; 2024: 6.8; 2025: 6.1; 2026: 5.8 - Broad money: M2: 2023: 4.3; 2024: 5.3; 2025: (not listed) - Memorandum items - Nominal GDP (US$ billions): 2023: 165.4; 2024: 160.2; 2025: 156.6; 2026: 159.5; 2027: 166.3 - Population (millions): 2023: 4.9; 2024: 5.0; 2025: 5.1 - GDP per capita (US$): 2023: 33,663; 2024: 31,971; 2025: 30,634; 2026: 30,593; 2027: 31,273 *Source: IMF Executive Board Concludes 2025 Article IV Consultation with Kuwait (Press Release No. 26/061).* --- ## References - [Kuwait and the IMF](http://www.imf.org/external/country/KWT/index.htm) - [IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance) - [Press Releases](https://www.imf.org/en/news/searchnews) - [PRESS CENTER](http://presscenter.imf.org/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2026/02/23/pr-26061-kuwait-imf-executive-board-concludes-2025-article-iv-consultation_