Opec+ output cuts weigh on Kuwait’s economic growth

Reuters

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.

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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.

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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.