Amidst global economic downturn and trade disruptions, World Bank boosts Kuwait's predicted growth to 2.2%
In a cheerful update, the World Bank has revised its projections for Kuwait's economic growth in 2025, now predicting a growth rate of 2.2%, up from its initial January estimation of 1.7%.
The Bank expects continued growth, with a forecast of 2.7% in both 2026 and 2027, thanks to a gradual boost in oil production and expansion of non-oil sectors.
On the other hand, the global economy appears to be heading for rough waters. The Bank has lowered its global growth estimate for this year to 2.3%, down from a previous 2.7% in January, attributing the decline to mounting trade restrictions and geopolitical strife.
The 2020s might end up being the weakest decade for global growth in the last 60 years, the World Bank cautions.
For the Middle East and North Africa (MENA) region, the World Bank has revised its growth predictions for 2025 by 0.7 percentage points, down to 2.7%. In 2026, growth is projected to strengthen to 3.7%.
While the outlook for the MENA region is relatively optimistic, the World Bank expects a rebound in the medium term, chiefly due to a sustained increase in oil output despite ongoing challenges and subdued oil prices.
Specifically, the Gulf economies are projected to expand by 1.6% in 2024, but are expected to rebound robustly to 3.2% in 2025, 4.5% in 2026, and 4.8% in 2027, fueled by both increased oil production and efforts to diversify non-oil sectors.
While oil-exporting countries outside the Gulf may face increased pressure due to falling oil prices and dwindling external demand, economic diversification remains crucial for their long-term growth.
In essence, the World Bank's global economic prospects report for June 2025 predicts a worldwide economic growth patch that will likely be one of the slowest since the 2008 global financial crisis, primarily due to rising protectionism, geopolitical instability, and a slump in global investment.
Interestingly, compared to global or other MENA regional growth forecasts, the GCC countries, including Kuwait, are projected to enjoy moderate growth, largely driven by activity in the oil sector and economic diversification efforts.
The financial sector in Kuwait is anticipated to be bolstered due to the predicted economic growth, with an emphasis on the expansion of non-oil businesses. In the global arena, business growth projections have been revised downward, primarily due to mounting trade restrictions and geopolitical strife.
