São Paulo – The Gross Domestic Product (GDP) of Kuwait, an Arab country in the Gulf, was up 8.25% last year, according to estimates issued by the International Monetary Fund (IMF) last Friday (15th). The performance was driven by a 15% increase in oil production.
The increase in oil revenues caused the country to post a current account surplus equivalent to 41% of its GDP and a fiscal surplus of 30%, according to the IMF.
The growth of non-oil sectors, however, was “moderate” and stood at 4.5% last year. In this case, growth was driven by government spending, which increased by nearly 20% in the fiscal year 2011-2012, according to the Fund.
The increase in bank loans to the private sector “remained weak” at 2.5%, according to the Fund. In this case, performance was affected by a decline in financing to investment companies.
The inflation rate was 4.75% last year, as against 4% in 2010. prices were up 9.25% for foods and 3.5% for other sectors.
The stock market did not keep pace with the GDP. According to the IMF, the stock market index dropped 16.5% in 2011. It was the fourth consecutive bearish year; however, there was recovery in 2012 to a certain extent, according to the Fund.
The IMF believes the economic outlook for this year is positive, as government spending is expected to continue growing. Still, the Fund advises a set of actions so the country’s wealth is preserved for future generations. High dependency on oil, increased public spending, and population growth are cause for concern in the medium term.
*Translated by Gabriel Pomerancblum
