Kuwait: Economy

Kuwait has been experiencing political and economic instability on multiple fronts. On the one hand, due to the domestic political struggle taking place between the executive and the legislative branches, the efficiency of governance is severely undermined. By April 2023, Kuwaiti citizens had witnessed seven governments inaugurated in three years, marking a very turbulent period even in a country with a decades-long tradition of ongoing political crises. On the other, internationally, the past couple of years had produced serious ups and downs in the world economy, including the various fluctuations of oil prices, the Covid-19 crisis, and the various economic and financial effects of the war in Ukraine, all of which had serious and far-reaching effects on the small oil-producing country. This chapter attempts to provide a broad overview of the general status of the Kuwaiti economy in the context of ongoing domestic and international challenges, highlighting the main dilemmas decision-makers, observers and investors have to face. The first section provides a general overview of the country’s economic background and traditional challenges, while the second and third parts focus on current domestic and international challenges.