IMF Warns Kuwait: Urgent Reforms Needed for Economic Diversification
Kuwait's economic outlook has been analysed in a recent IMF report, with Al-Shall Financial Consulting Company offering insights. The report highlights the need for policy changes to diversify income sources and boost competitiveness, while also warning about the risks of high borrowing.
The IMF's proposals include limited financial reforms, such as a 15 percent tax on multinational corporations and a public debt law. However, Al-Shall Consulting stressed that these measures are not sufficient and urged for more comprehensive changes.
The report projects a 2.6 percent economic growth this year, driven by increased oil production. Yet, it also warns of a decline in the current account surplus, from 29.1 percent of GDP in 2024 to 26.5 percent in 2025. Kuwait's budget deficit is expected to rise to 7.8 percent in 2025/2026. Despite these challenges, Kuwait achieved real economic growth of 1 percent in the first quarter of 2025, thanks to the non-oil sector.
Al-Shall Consulting found the IMF report lacking in new information. While it acknowledges the positive impact of increased oil production, it also highlights the need for urgent policy changes to address the budget deficit and promote economic diversification. Kuwait's economic future depends on these reforms.
