Kuwait’s nominal GDP up 29pc in 2011

Kuwait’s nominal gross domestic product (GDP) grew 29 per cent in 2011 to hit a record high of KD44.4 billion ($155.8 billion) compared to KD34.4 billion the previous year on the back of soaring oil prices, said a report.

The oil sector was the main driver of growth, which rose 50 per cent to hit KD28 billion. The oil sector’s share of GDP rose to just under two-thirds, the highest in three decades, according to the report by National Bank of Kuwait (NBK).

This growth was led by a 47 per cent surge in oil GDP to an all-time high of KD 28.7 billion, on the back of record high oil prices. This pushed the oil sector’s contribution to total GDP to almost 65 per cent, the highest in three decades, the NBK stated.

According to NBK, the non-oil GDP was up just under 6 per cent and stood at KD15.7 billion. The GDP per capita, an indicator of the standard of living, reached a record of around KD12,000 in 2011, up by more than 25 per cent on the previous year.

‘This year we expect GDP to grow at a solid, yet slower, pace of 10-15 per cent as oil prices remain firm,’ the NBK said in its report.

The oil and gas sector (excluding refining) was the star performer of the economy during 2011, growing by a whopping 49 per cent year-on-year to almost KD28 billion and representing 62 per cent of total GDP.

This was not only bolstered by record oil prices, but also by an increase in Kuwait’s crude oil production which jumped by some 347,000 barrels per day (bpd) in 2011 to an average daily production of 2.7 million bpd, said the NBK report.

Other sectors that witnessed double-digit growth included utilities (i.e. electricity, gas and water) as well as the community, social and personal services sector which includes a large chunk of government spending, it stated.

Meanwhile, financial institutions, which represent the third largest sector in the economy, declined by almost 8 per cent in 2011 as credit growth was soft and investment companies continued to deliver, the report said.

According to NBK, the government consumption spending growth accelerated to 13 per cent to a record KD6.7 billion in part related to significant salary increases during the year.

After falling in the previous two years, private consumption grew by about seven per cent to KD10.1 billion helped by a strong consumer sector that has benefited from wage increments and steady employment levels, the report added.

-TradeArabia News Service, 14 Aug 2012