Kuwait’s real GDP growth will grow in 2018 following a contraction in 2017, according to a new forecast by BMI Research.
In its report, BMI noted that oil production will do little to support growth in the short-term, given the extension of the OPEC quota to the end of 2018.
The non-oil sector, however, will benefit from rising government spending, with BMI forecasting real GDP growth of 1.9 percent for the year.
From 2019 onwards, with oil production expanding in continuous growth with the non-oil economy, Kuwait’s real GDP is expected to above 3 percent in the medium-term, for the first time since 2012.
Much of the non-oil growth, the BMI report notes, will largely be driven by the construction of an urban area in the north of Kuwait. Among the main proponents of “Silk City” is the eldest son of Emir Sheikh Sabah Ahmad Al-Jaber Al-Sabah, who was named as deputy Prime Minister as part of a major cabinet reshuffle in late 2017.
The Kuwaiti government has said that the $100 billion project will play an important role in the country’s diversification efforts, and will include a 1,000-metre skyscraper, a wildlife sanctuary, a new airport, a duty-free shopping zone and media and conference facilities.