Doha - flag: report predicted QNB Group on recent developments of the economy of Kuwait and future prospects, that Kuwait remains in a good position to cope with the decline in world oil prices, thanks to the strong fundamentals of the total of its economy and possess a minimum equivalent point in oil prices between the Gulf Cooperation Council (GCC).
The report also predicted that the slowing real GDP growth in 2015 (1 per cent) with the government to reduce support before rebounding in 2016 (1.8 per cent) with the implementation of major development projects.
He pointed out in this context that the government plans to invest $ 100 billion in oil and gas sector during the period 2015-2019 to enhance the production, and the development of refineries and petrochemical facilities, transportation, pointing to expectations that leads the Burgan oil project (among other things) to accelerate oil production starting in 2017.
He added that the projections indicate that the non-oil sector will be the main engine of growth, driven by government investments, such as Kuwait Metro project, the new port, and the re-development of the airport.
With regard to inflation, he said that those expectations likely to rise with an average reduction of support and have the highest impact in 2015 (4.2 per cent), then moderating to 4 per cent during the period 2016-2017.
He pointed to the government's announcement plans for large cuts in current spending, through the removal of subsidies on diesel, electricity, water, health care, and oil, while likely to slow foreign inflation in 2015, with the decline in global commodity prices due to weak global demand, with expectations that changed this situation to climb in the period 2016-2017 and that leads to a higher rate of imported inflation.
With regard to the financial report, the balance expected to check Kuwait small fiscal surplus in 2015 (by 1.6% of GDP) while reducing government spending, while the surplus is estimated to be 4.9 percent rise in GDP in the period 2016- 2017 as a result of the recovery of the proceeds of hydrocarbons with high oil prices.
In this context referred to the declaration of the Kuwaiti government plans to deduct 20 per cent of current expenditure in 2015, which will be achieved mainly through a reduction in support, is expected to lead to a moderation of expenditure throughout the period of 2015 to 2017 in spite of the growing salaries and wages and increase bill in government investment.
He said that the public debt ratio remained low at 6.2 percent of GDP by the end of 2014, with the government owning a huge center of foreign assets through sovereign wealth fund.
In the banking sector expected to slow the growth of deposits in 2015, the impact of the decline in the financial surpluses, which leads to a reduction of cash flows associated with the oil to the banking sector, it is probable that the change in the period 2016-2017.
He pointed to expectations that credit growth is accelerating a bit with the large increase in consumer lending and to support strong macroeconomic fundamentals in Kuwait asset quality in the future, which means higher profit due to lower non-performing loan ratio of the lucrative and high bank capital.
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