KUWAIT SAW KD 19 BILLION IN CONSUMER SPENDING IN '23

  • 08/08/2022

Kuwait City: Fitch Solutions anticipates high consumer spending growth in Kuwait in 2022 and 2023, with household spending anticipated to increase by 6.8 percent in 2022 and 2.6 percent the following year. Additionally, it is anticipated that the nation's gross domestic product will expand by 7.1 percent this year and 4.6 percent the following. The agency claimed in a recent report that Kuwait's household spending will increase in 2022 as a result of the country's epidemiological situation improving following the start of a successful Corona vaccination campaign, which will lessen the likelihood of closures for the remainder of this year and until 2023. 


Fitch continued, "The total spending of families in Kuwait is expected to reach approximately 19.8 billion dinars in 2023, up from 18.9 billion dinars in 2022, knowing that the expectations in this regard about two months ago predicted that the amount will be 11.8 billion dinars compared to 10.7 billion dinars in 2021. The agency noted that the odds of delaying the implementation of the value-added tax until 2023 or 2024, amid concerns about inflation, geopolitical events, and local political conditions, are supportive of expectations of the growth of household spending in Kuwait in the current year and the following year. 

According to the sources, the agency's risk team anticipates that the Kuwaiti government's financial flexibility will lessen the need for a new tax in the current year. According to Fitch Solutions, Kuwait's consumer expenditure is expected to increase this year, which is in line with forecasts for a 7.1 percent GDP growth in Kuwait in 2022. 

Wages and employment in Kuwait will be supported by the increase in oil prices following Russia's invasion of Ukraine, which will also increase crude production and loosen OPEC+ limitations. Although they issued a warning about the continuous rise in inflationary pressures, the sources claimed that Kuwait's oil study team anticipates that the average price of Brent would average roughly $100 per barrel in 2022, compared to $72 per barrel in 2021. The agency claimed that Kuwait's service industries began to experience inflation at the beginning of the second half of this year. The country's consumer spending faces a serious threat from rising inflation for the remainder of this year, which might result in a loss of buying power and alter projections for consumer spending in the future.

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