Kuwait Infrastructure Report Q2 2016
BMI View: Kuwait will record modest growth of 3.9% in 2016 in real terms over 2016 and average annualgrowth of 4% throughout our forecast period. The move to diversify the economy as well as liberalise thesector for foreign investment will underpin growth. High levels of bureaucracy and an opaque businessenvironment will weigh on expansion and investor confidence.Latest Updates And Structural Trends
We maintain our forecasts of 3.9% real growth in 2016 and annual average growth of 4.1% over the nextfive years and 4% over 10 years.
Kuwait's five-year plan (which runs until 2020) will be the major growth driver in lending opportunitiesand profitability. The National Assembly passed the plan in February 2015, which envisages spending ofabout USD116bn on 521 development projects.
The government, with a supportive parliament, has been able to progress on long-stalled infrastructuredevelopment projects and implement increases in public capital expenditure. Capital spending wasKWD0.6bn for the fiscal year to September, up 16% y-o-y. It is currently at 23% of the full-year budget,five percentage points above the five-year average.
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