## Kuwait: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Kuwait

_IMF Staff Country Reports, March 28, 2022_

## Source details

**Canonical URL:** [Kuwait: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Kuwait](https://www.imf.org/en/publications/cr/issues/2022/03/24/kuwait-2021-article-iv-consultation-press-release-staff-report-and-statement-by-the-515724)

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## Bibliographic details
- Published: March 28, 2022
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400205736.002

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### Summary
- Sustained political gridlock has hobbled reforms and increased macroeconomic vulnerabilities, but a new high-level effort offers hope for resolving the impasse.
- Authorities have been preparing a comprehensive reform plan which, if adopted by parliament, would pave the way to address the structural and fiscal imbalances in the economy and promote sustainable and inclusive growth.
- Authorities responded swiftly and decisively to the COVID-19 crisis with social distancing restrictions and fiscal, monetary, and financial policy support measures.
- In 2021, a high rate of vaccination was achieved, although there has been a major surge in infections with the recent arrival of the Omicron variant.
- A nascent economic recovery is underway, supported by higher oil prices and some relaxation of mobility restrictions.
- Substantial uncertainties to the economic outlook underscore the importance of phasing out COVID-19 relief measures at a measured pace as the economy recovers, and of accelerating the reform momentum to limit risks and rebuild buffers.
- Banks entered the crisis from a position of strength and have remained well capitalized and highly liquid.

### Major findings and risks
- Political gridlock has delayed reforms and increased macroeconomic vulnerabilities.
- A comprehensive reform plan is being prepared by the authorities; parliamentary adoption is pivotal for addressing structural and fiscal imbalances and for promoting sustainable and inclusive growth.
- COVID-19 policy response combined public health measures (social distancing) with fiscal, monetary, and financial support.
- High vaccination rates in 2021 were followed by a major surge in infections after the arrival of the Omicron variant.
- Economic recovery is nascent and supported by higher oil prices and relaxed mobility restrictions, but faces substantial uncertainties.
- Banking sector resilience: banks entered the crisis well capitalized and highly liquid and have remained so through the crisis.

### Policy recommendations and priorities
- Phase out COVID-19 relief measures at a measured pace as the economy recovers to avoid premature withdrawal or prolonged fiscal strain.
- Accelerate reform momentum to limit risks and rebuild buffers; adoption of the comprehensive reform plan by parliament is essential.
- Continue monitoring macroeconomic outlook given substantial uncertainties and the evolving pandemic situation.

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- **1kwtea2022001**
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_Source: https://www.imf.org/en/publications/cr/issues/2022/03/24/kuwait-2021-article-iv-consultation-press-release-staff-report-and-statement-by-the-515724_