2018年-IMF国际货币组织全球_Kuwait_2017_Article_IV_Consultation_68页_1mb

2017 Article IV Consultation Summary: Kuwait

Core Content

The 2017 Article IV consultation with Kuwait, conducted by the IMF, assessed the country's economic performance and policy outlook. The consultation concluded on January 12, 2018, following discussions with Kuwaiti officials from October 31 to November 13, 2017. The key focus areas included fiscal sustainability, financial stability, private sector-led growth, and economic diversification.

Main Views and Key Information

Economic Performance

• Non-oil growth has improved modestly over the past two years, with real non-hydrocarbon growth expected to reach 2.5% in 2017, driven by improved confidence.
• Inflation has moderated, projected to reach a multiyear low of 1.75% in 2017, due to falling housing rents and favorable food price developments.
• Real GDP declined by about 2.5% in 2017 due to a 6% drop in hydrocarbon output, reflecting the implementation of the OPEC+ deal.
• Oil and gas exports have fluctuated, with a significant decline in 2015 and a partial recovery in 2017.
• Average oil export price has decreased over the years, but has shown some recovery in 2017.

Fiscal Position

• The government's underlying fiscal position has improved due to spending restraint, but financing needs remain large.
• The fiscal balance (excluding mandatory transfers to the Future Generations Fund and investment income) posted a deficit of 17.5% of GDP in 2016/17 for the second consecutive year.
• Financing needs were met through the drawdown of General Reserve Fund (GRF) assets, domestic borrowing, and a successful debut of an international sovereign bond sale.
• Revenue from non-oil sources has increased, but expenditure has also risen, with a focus on current spending.

External Sector

• The external current account recorded its first deficit in many years in 2016, at about 4.5% of GDP, largely due to falling oil prices.
• As oil prices recover, the current account is expected to be broadly balanced.
• International reserve assets have remained stable, with a coverage of about 6.7 months of imports of goods and services.

Financial Sector

• The banking sector is sound, with high capitalization (CAR of 18.3%), steady profitability (ROA of 1.1%), low non-performing loans (2.4%), and high loan-loss provisioning (over 200% coverage).
• Banks have maintained strong liquidity buffers, although deposit and credit growth have slowed.
• Private sector deposit growth has declined in recent years, but has been partly offset by an increase in public sector deposits.
• The Central Bank of Kuwait (CBK) has taken a prudent approach to regulation and supervision, and has raised policy rates in line with the U.S. Federal Reserve.

Policy Recommendations

• The IMF Executive Board emphasized the need for deep and sustained reforms to reduce financing needs, create space for capital outlays, and achieve intergenerational equity.
• They recommended further curtailment of current expenditure, introduction of excises and VAT, and better alignment of public and private sector compensation.
• Education reform is highlighted as essential to equip new graduates with skills for private sector jobs.
• The IMF encouraged the authorities to strengthen the medium-term fiscal framework to reduce implementation risks and support fiscal consolidation.
• Privatization and public-private partnerships are seen as important for boosting productivity and job creation.
• The peg to a basket remains appropriate for the Kuwaiti economy, providing an effective nominal anchor.

Risks and Outlook

• Main risks to the outlook include lower oil prices over the medium term, tighter global financial conditions, heightened regional security and geopolitical risks, and delays in project and reform implementation.
• The IMF noted that while there are short-term upside risks from recent oil price recovery, these may be offset by lower-than-expected oil output.
• Long-term fiscal sustainability is a priority, with the need to streamline current spending and diversify revenue.
• Private sector-led growth is essential, and improving the business climate and facilitating access to land are key steps.

Conclusion

The IMF concluded that Kuwait is in a position of strength due to large financial buffers and a sound financial sector, but the country faces challenges in maintaining fiscal sustainability and achieving economic diversification. The IMF encouraged continued efforts to implement structural reforms, streamline fiscal policies, and foster private sector growth to ensure long-term economic stability and resilience.