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Kuwait Economy


According to the 2008 Index of Economic Freedom, Kuwait has the second-most free economy in the Middle East. In March 2007, Kuwait's foreign exchange reserves stood at $213 billion. The Kuwait Stock Exchange, which has about 200 firms listed, is the second-largest stock exchange in the Arab world with a total market capitalisation of $235 billion. In 2007, the Kuwaiti government posted a budget surplus of $43 billion.

Kuwait has proven crude oil reserves of 104 billion barrels, estimated to be 10% of the world's reserves. According to the Kuwaiti constitution, all natural resources in the country and associated revenues are government property. Being a tax-free country, Kuwait's oil industry accounts for 80% of government revenue. Petroleum and petrochemicals accounts for nearly half of GDP and 95% of export revenues. Increase in oil prices since 2003 resulted in a surge in Kuwait's economy.

Kuwait currently pumps 2.9 million barrels per day (bpd) and its full production capacity is a little over 3 million bpd, including oil production in the neutral region that it shares with Saudi Arabia. Kuwait oil production is expected to increase to 4 million bpd by 2020. To realise this production target, Kuwait Petroleum Corporation plans to spend $51 billion between 2007 to 2012 to upgrade and expand the country's existing refineries. However, the country's economy was badly affected by the global financial crisis of 2008. In 2009, the Central Bank of Kuwait devised a $5.15 billion stimulus package to help boost the economy.

Other major industries include shipping, construction, cement, water desalination, construction materials and financial services. Kuwait has a well developed banking system and several banks in the country date back to the time before oil was discovered. Founded in 1952, the National Bank of Kuwait is the largest bank in the country and one of the largest in the Arab world. Other prominent financial institutions based in Kuwait include the Gulf Bank of Kuwait and Burgan Bank, which is named after the largest oilfield in the country.

Kuwait's climate limits agricultural development. Consequently, with the exception of fish, it depends almost wholly on food imports. About 75% of potable water must be distilled or imported. The government is keen on decreasing Kuwait's dependence on oil to fuel its economy by transforming it into a regional trading and tourism hub. The planned $77 billion Madinat al-Hareer (City of Silk) is the largest real estate development project in the Middle East. The Central Bank issues Kuwait's currency, the Kuwaiti dinar. As of May 2012, the dinar is the highest-valued currency unit in the world.

In 2011, estimated exports stood at $94.47 billion and imports were around $22.41 billion. Petroleum, petrochemical products, fertilisers and financial services are major export commodities. Kuwait imports a wide range of products ranging from food products and textiles to machinery. Kuwait's most important trading partners are Japan, United States, India, South Korea, Singapore, China, European Union and Saudi Arabia. Japan is the largest customer of Kuwaiti oil followed by India, Singapore and South Korea.


Economy - overview : Kuwait has a geographically small, but wealthy, relatively open economy with crude oil reserves of about 104 billion barrels - about 7% of world reserves. Petroleum accounts for nearly half of GDP, 95% of export revenues, and 95% of government income. Kuwaiti officials have committed to increasing oil production to 4 million barrels per day by 2020. The rise in global oil prices throughout 2011 is reviving government consumption and economic growth. Kuwait has experienced a 20% increase in government budget revenue, which has led to higher budget expenditures, particularly wage hikes for many public sector employees. Kuwait has done little to diversify its economy, in part, because of this positive fiscal situation, and, in part, due to the poor business climate and the acrimonious relationship between the National Assembly and the executive branch, which has stymied most movement on economic reforms. In 2010, Kuwait passed an economic development plan that pledges to spend up to $130 billion over five years to diversify the economy away from oil, attract more investment, and boost private sector participation in the economy.
GDP (purchasing power parity) : $149.8 billion (2011 est.)
GDP (official exchange rate) : $171.1 billion (2011 est.)
GDP - real growth rate : 5.7% (2011 est.)
GDP - per capita (PPP) : $40,700 (2011 est.)
GDP - composition by sector : agriculture: 0.3%

industry: 47.4%

services: 52.3% (2011 est.)
Labour force : 2.243 million

note: non-Kuwaitis represent about 60% of the labour force (2011 est.)
Labour force - by occupation : agriculture: NA%

industry: NA%

services: NA%
Unemployment rate : 2.2% (2004 est.)
Population below poverty line : NA%
Household income or consumption by percentage share : lowest 10%: NA%

highest 10%: NA%
Investment (gross fixed) : 26.1% of GDP (2011 est.)
Budget : revenues: $108.3 billion

expenditures: $58.06 billion (2011 est.)
Taxes and other revenues : 57.4% of GDP (2011 est.)
Budget surplus (+) or deficit (-) : 20.5% of GDP (2011 est.)
Public debt : 6.8% of GDP (2011 est.)
Inflation rate (consumer prices) : 5.6% (2011 est.)
Central bank discount rate : 1.25% (31 December 2010 est.)
Commercial bank prime lending rate : 5.5% (31 December 2011 est.)
Stock of narrow money : $23.12 billion (31 December 2011 est.)
Stock of broad money : $94.26 billion (31 December 2011 est.)
Stock of domestic credit : $105.5 billion (31 December 2011 est.)
Market value of publicly traded shares : $119.6 billion (31 December 2010)
Agriculture - products : fish
Industries : petroleum, petrochemicals, cement, shipbuilding and repair, water desalination, food processing, construction materials
Industrial production growth rate : 8.7% (2011 est.)
Electricity - production : 49.82 billion kWh (2009 est.)
Electricity - consumption : 42.58 billion kWh (2008 est.)
Electricity - exports : 0 kWh (2009 est.)
Electricity - imports : 0 kWh (2009 est.)
Oil - production : 2.45 million bbl/day (2010 est.)
Oil - consumption : 354,000 bbl/day (2010 est.)
Oil - exports : 2.127 million bbl/day (2009 est.)
Oil - imports : 0 bbl/day (2009 est.)
Oil - proved reserves : 104 billion bbl (1 January 2011 est.)
Natural gas - production : 11.49 billion cu m (2009 est.)
Natural gas - consumption : 12.38 billion cu m (2009 est.)
Natural gas - exports : 0 cu m (2009 est.)
Natural gas - imports : 890 million cu m (2009 est.)
Natural gas - proved reserves : 1.798 trillion cu m (1 January 2011 est.)
Current account balance : $61.72 billion (2011 est.)
Exports : $94.47 billion (2011 est.)
Exports - commodities : oil and refined products, fertilizers
Exports - partners : Japan 15.5%, India 15.3%, South Korea 13.5%, China 10.1%, US 8.4% (2009)
Imports : $22.41 billion (2011 est.)
Imports - commodities : food, construction materials, vehicles and parts, clothing
Imports - partners : US 14.2%, China 9.5%, Saudi Arabia 7.3%, Japan 7.2%, Germany 6.1%, Italy 4.7%, India 4.4% (2009)
Reserves of foreign exchange and gold : $28.02 billion (31 December 2011 est.)
Debt - external : $44.45 billion (31 December 2011 est.)
Stock of direct foreign investment - at home : $3.028 billion (31 December 2011 est.)
Stock of direct foreign investment - abroad : $39.06 billion (31 December 2011 est.)
Exchange rates : Kuwaiti dinars (KD) per US dollar - 0.2858 (2011 est.); 0.2866 (2010 est.); 0.2877 (2009); 0.2679 (2008); 0.2844 (2007)
Fiscal year : 1 April - 31 March




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