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Opec+ output cuts weigh on Kuwait’s economic growth

Person, Worker, Clothing Reuters
Kuwait is working on increasing its installed oil production capacity to around 3 million bpd by 2027 from the existing 2.7 million bpd

Kuwait’s real GDP is expected to shrink by 2.3 percent in 2024 as a result of Opec+ production cuts, S&P said in a report.

Economic growth is predicted to be 2.4 percent per year from 2025 to 2027 as oil production restrictions ease slightly and the pace of huge government investment projects accelerates.

Brent oil averaged $83 per barrel last year and is forecast to reach about $85 in 2024 before falling to $80 in 2025-27.

Kuwait’s oil production averaged 2.6 million barrels per day in 2023-24 and is forecast to fall to an average of 2.4 million bpd in 2024-25. It will begin to rise slowly through 2027-28 as Opec+ mandated production cuts are tapered in line with increasing global demand.

On June 2 Opec+ extended most of its mandatory and voluntary cuts to late 2024 and into 2025.

Kuwait is working on increasing its installed oil production capacity to around 3 million bpd by 2027 from the existing 2.7 million bpd, S&P said.

However, the rating agency views Kuwait’s current GDP per capita growth rates as below those of its peers, affected by the lower contribution of the oil sector and lacklustre non-oil growth.

Therefore, the government is focusing on public-private partnerships and high-impact projects led by its “New Kuwait Vision 2035” programme to stimulate non-oil growth and reduce fiscal pressures.

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