National Bank of Kuwait expects transportation and banking sectors to lead the way
The economy in Kuwait is expected to grow by almost three per cent in 2010 and rise over four per cent throughout 2011, as stated by a top bank in the oil producing nation.
Kuwait’s nominal GDP fell almost 21.2 per cent in 2009 due to low oil prices and the effects of the worldwide financial crisis of 2008, reaching KD31.5 billion (Dh395 billion). A National Bank of Kuwait study projected that amount to rise about 18 per cent in 2010.
The Bank stated that a three per cent growth in real terms is expected for 2010 and an even better 4.3 per cent is to be looked for in 2011.
That growth is expected to be seen as larger projects get started. Stats for 2009’s GDP have not been officially stated yet.
Projected growth should come mainly from the private sector, with the transportation and banking industries also adding to it.
The study stated that both of those areas had contributed significantly to the GDP in the last few years and were expected to keep growing throughout the future as Kuwait transforms into a logistics and financial centre.
Transportation went from being four per cent of the GDP to covering eight per cent of GDP in the last couple of years. The financial sector grew from six per cent of the GDP to 14 per cent.
Meanwhile public administration has fallen from being 12 per cent of the GDP in the past to only six per cent of that total in 2008, which is due to the other growth sectors as stated by the study.
As expected, the financial crisis put a dent in the private sector’s shares, causing the public administration portion of the GDP to rise again during 2009 since the government enjoyed more security. The study stated that the positive movements in the GDP had to be maintained and supported as covered in the current five-year economic plan.
Over the long term Kuwait needs to diversify away from the oil sector for security and a host of other reasons. Less single sector dependency and an opportunity to create more jobs in Kuwait for locals are two benefits of growing with the post-oil economy. Non-oil sectors should grow steadily and surpass the oil sectors, although currently the nation stands with an even split.
As Kuwait controls approximately 10 per cent of proven global oil wealth the country has one of the largest economies in the Arab world, fifth behind Saudi Arabia and the UAE, Egypt and then Algeria.
Paul Holdsworth, Staff Writer, Gulf Jobs Market News