"Kuwait Business Forecast Report Q1 2014" is now available at Fast Market Research

From: Fast Market Research, Inc.
Published: Wed Nov 06 2013

Kuwait's economy is expected to continue to grow at a modest pace throughout the coming quarters, helped by a mild rise in oil production and strong domestic demand. While we remain cautious on the country's investment outlook, we have raised our 2014 real GDP growth forecast based on several recent signs of improvement on that front. We forecast real GDP growth of 3.0% in 2013 and 2.9% in 2014, from 2.6% previously.

Kuwait has seen a flurry of populist legislation recently, including several measures specifically targeting expatriate workers. This runs the risk of heightening uncertainty within the private sector, as well as cementing perceptions of the country as a hub of policy instability.

We expect some tensions to remain between the government and the legislative branch, even with the election of a renewed 'loyalist' parliament.

We forecast average consumer price inflation for Kuwait of 3.0% and 3.5% for 2013 and 2014 respectively, up from 2.9% in 2012. While we expect a slight fall in Kuwaiti food inflation over the near term on the back of lower global prices, a tight supply picture in the real estate market will fuel housing inflation over the coming quarters, in a trend seen across the Gulf Cooperation Council.

Full Report Details at
- http://www.fastmr.com/prod/713432_kuwait_business_forecast_report_q1_2014.aspx?afid=302

Key Risks To Outlook

As ever, given the economy's heavy dependence on oil, any sustained downturn in global energy prices would prove disastrous. That said, Kuwait has the financial wherewithal to cope with any short-term volatility in oil prices, and therefore the underlying risks in this regard are minimal.

Our forecasts assume that the implementation of the government's development plans will be slow owing to the impact of bureaucratic gridlock. However, the state certainly has the firepower to move forward with its capital spending plans if political compromises can be reached. Furthermore, a renewed loyalist parliament following legislative elections in July offers the prospect of an acceleration of long-delayed economic reforms and infrastructure projects. Any improvement on this front would pose upside risks to our growth forecasts, as well as downside risks to our budget surplus projections.

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