## Kuwait: 2023 Article IV Consultation-Press Release; and Staff Report

_IMF Staff Country Reports, September 18, 2023_

## Source details

**Canonical URL:** [Kuwait: 2023 Article IV Consultation-Press Release; and Staff Report](https://www.imf.org/en/publications/cr/issues/2023/09/15/kuwait-2023-article-iv-consultation-press-release-and-staff-report-539186)

## Other formats

- [Markdown version](/en/publications/cr/issues/2023/09/15/kuwait-2023-article-iv-consultation-press-release-and-staff-report-539186/index.md)
- [Structured JSON version](/en/publications/cr/issues/2023/09/15/kuwait-2023-article-iv-consultation-press-release-and-staff-report-539186/index.json)
- [Bundle manifest](/en/publications/cr/issues/2023/09/15/kuwait-2023-article-iv-consultation-press-release-and-staff-report-539186/bundle-manifest.json)

## Bibliographic details
- Published: September 18, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400254680.002

---

### Overview
- Benefiting from high oil prices, Kuwait’s economic recovery continues and inflation is contained.
- A structural reform package is needed to boost labor productivity and non-oil private sector-led growth.
- Strong non-oil private sector-led growth is needed to absorb new labor market entrants; this requires a comprehensive set of reforms that tackle deep-rooted structural challenges.
- To incentivize Kuwaitis to seek careers in the private sector, labor market reforms to promote a market aligned wage structure are needed.

### Economic performance and projections
- Non-oil gross domestic product (GDP) growth rose to an estimated 3.4 percent in 2021, benefiting from a recovery in domestic and external demand.
- Non-oil GDP growth strengthened to 4.0 percent in 2022.
- Pickup in oil production, together with stronger non-oil activity, resulted in a rebound in overall real GDP growth to 8.2 percent in 2022.
- Oil GDP growth is expected to decline in 2023 due to oil production cuts.
- Non-oil GDP growth is expected to stay robust in 2023, driven by domestic demand, and is foreseen to remain steady over the medium term.

### Policy analysis
- The recovery has been supported by high oil prices and a pickup in oil production, but medium-term resilience depends on diversification of growth away from oil.
- Persistent structural challenges in the labor market and public-private wage differentials hinder private sector absorption of new labor market entrants.
- Fiscal and policy settings should consider both the implications of volatile oil revenues and the need to finance reforms that foster private sector-led growth.

### Policy recommendations
- Implement a comprehensive structural reform package to:
  - Boost labor productivity.
  - Promote non-oil private sector-led growth.
  - Address deep-rooted structural challenges across labor market and business environment policies.
- Undertake labor market reforms to:
  - Promote a market aligned wage structure to incentivize Kuwaitis to seek careers in the private sector.
  - Facilitate absorption of new labor market entrants through private sector job creation.

*Source: Kuwait: 2023 Article IV Consultation-Press Release; and Staff Report (IMF Staff Country Reports 2023, No. 331).*

---

## Content in this bundle

- **1kwtea2023001**
  - [1kwtea2023001 (Markdown version)](/-/media/files/publications/cr/2023/english/1kwtea2023001.pdf.md){rel="alternate" type="text/markdown"}
  - [1kwtea2023001 (PDF)](/-/media/files/publications/cr/2023/english/1kwtea2023001.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/cr/issues/2023/09/15/kuwait-2023-article-iv-consultation-press-release-and-staff-report-539186_