According to the International Monetary Fund (IMF), an “incipient recovery” is underway in Kuwait, following a 2.6% contraction in real GDP last year that was largely caused by OPEC+ production cuts. Looking ahead, the IMF projects 2.6% real GDP expansion in 2025, fueled by an expected 2.4% increase in oil production (due to eased OPEC+ restrictions) and 2.7% growth in the non-oil sector, which remains supported by robust private domestic spending. On the fiscal side, lower global oil revenue will put pressure on public finances, causing the fiscal deficit to widen dramatically from 2.2% to a projected 7.8% of GDP in the 2025/26 fiscal year. Simultaneously, the current account surplus is expected to shrink slightly, though inflation is set to moderate to 2.2%.
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