General

The economy of Kuwait is based almost exclusively on oil; crude oil reserves are estimated at about 94 billion barrels - 10% of world reserves. Petroleum accounts for nearly half of GDP, 90% of export revenues, and 75% of government income By law, 10% of all oil revenues is to be deposited into a special reserve fund to provide for the future when oil revenues are exhausted. Due to the lack of water and arable land Kuwait couldn't develop agriculture as an economic activity. About 75% of potable water must be distilled or imported. During the Iraqi occupation (1990-1991), a great deal of Kuwaiti wealth was taken to Iraq; the Kuwaiti government-in-exile, however, retained control of the country's very substantial overseas assets. In a move to stimulate private investment, the government paid off household debts, increased government salaries and compensated for war damage. This spending plus the costs of the war reduced Kuwait's overseas assets from $100 billion in 1990 to $40 billion in 1992. Limited oil exports began a few months after the liberation.

It was anticipated that pre-invasion oil production levels would be reached by the end of 1992. It was also estimated that it would take two to five years to restore the country's full export capacity. Gradually, oil exports started to get back to normal and higher oil prices helped reduce the budget deficit in 1999. However, with the increase in oil revenues following the restoration of the country's export capacity, the government expanded its welfare role in health, education and municipal services and public utilities.

Overview

Kuwait is a small, rich, relatively open economy with proved crude oil reserves of about 96 billion barrels - 10% of world reserves. Petroleum accounts for nearly half of GDP, 95% of export revenues, and 80% of government income. 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. Kuwait continues its discussions with foreign oil companies to develop fields in the northern part of the country.

GDP (purchasing power parity):
$48 billion (2004 est.)

GDP - real growth rate:
6.8% (2004 est.)

GDP - per capita:
purchasing power parity - $21,300 (2004 est.)

GDP (official exchange rate):
$4.955 trillion (2005 est.)

GDP - per capita:
purchasing power parity - $30,400 (2005 est.)

GDP - composition by sector:
agriculture: 0.4%
industry: 60.5%
services: 39.1% (2004 est.)