Kuwait’s consumer spending solid in Q1

Kuwait’s consumer spending solid in Q1

KUWAIT: Official consumer, monetary and banking data in the first quarter of 2023 continued to signal a normalization in Kuwait’s non-oil economy post-pandemic. Closely watched leading indicators such as consumer spending, real estate sales and bank credit point to a moderation in non-oil activity amid still-elevated inflation, tighter monetary conditions and softening global macroeconomic conditions. Surprising on the upside in 1Q23, however, was the uptick in project activity, suggesting some increased momentum albeit from a very low base.

The recovery in expatriate numbers in 2022, as seen in the official PACI population data, many of which will likely work on projects, further fleshes out a macroeconomic picture that is still fairly positive despite the more challenging conditions. This included in 1Q23 the resurfacing of troubles in the political sphere, which eventually culminated in the resignation of the government and a Constitutional Court ruling that voided the 2022 national assembly on procedural grounds and reinstated its predecessor. The 2020 parliament has since been dissolved by Amiri decree and fresh elections have been called for 6 June.

Anxieties over the trajectory of global economic growth in 2023 hammered oil prices, forcing several OPEC+ members including Kuwait to roll out further production cuts from the