Kuwait records 85.5% jump in trade with Japan

Unsplash/Jezael Melgoza

• Trade surplus with Japan reached $823m in 2022
• Exports from Kuwait have grown for 22 consecutive months
• Energy is at the “forefront” of the relationship

Kuwait’s trade surplus with Japan has increased by 85.5 percent in the past year to JPY110.3 billion ($823 million) in January, according to government data.

Overall exports from Kuwait to Japan surged 81.2 percent year on year to JPY126.5 billion for the 22nd consecutive month of expansion. 

Imports from Japan also soared 56.4 percent to JPY16.1 billion, up for the ninth month in a row. 

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Robert Mogielnicki, senior resident scholar at the Arab Gulf States Institute in Washington, said: “The data is a good reminder that the Asia-Gulf economic story is not all about China, or India for that matter.

“There are other important Asian actors, such as Japan and South Korea, that do matter to Gulf states like Kuwait.”

Japan’s foreign minister Hayashi Yoshimasa previously said Kuwait was a “strong partner of Japan”, following a telephone exchange with his Kuwaiti counterpart Sheikh Dr Ahmad Nasser Al-Mohamed Al-Sabah in April last year.

In March 2022, Kuwait Petroleum Corporation signed an agreement with Japan’s Nippon Export and Investment Insurance to fund a variety of projects worth in the region of $1 billion.

Mogielnicki added: “The energy component is at the forefront of the Japanese-Kuwait trade relationship. Much of this relationship involves Kuwaiti exports of oil and gas and Japanese exports of cars.”

For the whole of 2022 Kuwait’s crude oil exports to Japan stood at 221,000 barrels per day, up 5.9 percent from the previous year, and made up 8.1 percent of total Japanese crude imports.

At the same time the Middle East’s trade surplus with Japan widened 32.8 percent to JPY1 trillion last month. Japan-bound exports from the region increased 34.6 percent from a year earlier, the data indicates. 

Crude oil, refined products, liquefied natural gas and other natural resources, which accounted for 95.7 percent of the region’s total exports to Japan, grew 37.2 percent. 

The region’s overall imports from Japan also swelled 43.4 percent on demand for automobiles, machinery and steel. 

The world’s third-biggest economy logged a record global trade deficit of JPY3.5 trillion in January. As higher energy bills and the yen’s depreciation contributed to increase the value of its imports, export growth slowed, the government data showed. 

The Organisation for Economic Co-operation and Development forecasts Japanese GDP growth of 1.8 percent in 2023.