Kuwait economy rebounds in Q1 with 1% growth
The rebound marks the end of seven consecutive quarters of contraction, driven primarily by a gradual recovery in the non-oil sector.
The bank's analysis noted that the non-oil economy continued to expand, supported by sustained momentum in manufacturing, real estate, and transportation sectors, while the impact of previous oil production cuts has begun to fade.
In parallel, Kuwait's oil production began increasing in April, adding 135,000 barrels per day, which is expected to benefit the overall economy in the coming months despite still-muted gains from the oil sector.
The growth comes as the World Bank and the International Monetary Fund project that the GCC economy will grow by around 3.2–3.5 percent in 2025, supported by the rollback of OPEC+ production cuts and ongoing efforts to diversify the economy, despite global headwinds.
NBK's analysis stated: 'With the negative effects of earlier voluntary oil production cuts beginning to fade, oil GDP recorded only a marginal decline, the softest since Q2 2023.'
Growth in Kuwait's non-oil sector slowed to 2 percent year-on-year in the first quarter of 2025, down from 4 percent in the previous quarter, reflecting a moderation in manufacturing activity.
Meanwhile, the oil sector contracted by 5.7 percent year on year, compared to a 0.3 percent contraction in the same period of 2024.
Average oil output in the first quarter declined to 2.4 million bpd, an annual drop of 0.7 percent.
However, NBK's report pointed to a likely improvement starting in the second quarter of this year, as Kuwait began unwinding OPEC+ production cuts in April, which could raise output to 2.2 million bpd.
'Originally planned to be unwound over the course of 18 months, OPEC+ has accelerated the pace of supply hikes with output now on a path to be fully restored in September, a full year ahead of schedule,' the report stated.
This, combined with ongoing support for non-oil activity and the implementation of key public investment projects, is expected to help stabilize GDP growth.
Across the Gulf region, the economic performance in the first quarter of 2025 also showed broad strength.
Saudi Arabia reported a robust 3.4 percent year‑on‑year rise in GDP, driven by a 4.9 percent expansion in non‑oil activities, while oil output fell slightly by 0.5 percent, according to GASTAT.
The UAE's non-hydrocarbon economy continued to drive growth, supporting full-year GDP forecasts of around 4.4 percent, underpinned by steady oil output and surging sectors of services, construction, and trade.
CPI up
Consumer prices in Kuwait rose in June, with the Consumer Price Index increasing by 0.29 percent from the previous month to 136.9.
On an annual basis, inflation reached 2.32 percent compared with June 2024. The food and beverage group recorded the highest annual increase at 5.11 percent, driven by rising costs across categories including cereals, meat, dairy products, and vegetables.
Other notable annual increases included clothing and footwear with 3.93 percent, miscellaneous goods and services with 4.80 percent, and health at 2.94 percent.
Conversely, the transportation group recorded a decline of 1.81 percent year on year.
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