
Kuwait Risk August 2018
Kuwait will enjoy growth after 2017’s slump thanks to higher oil output. Risks remain relating to the geopolitical and domestic political backdrop and the commercial environment.
Economic risk (MEDIUM): Kuwait will get a boost from looser OPEC caps but that masks a very high dependence on oil and the resulting volatility for its economy, exports and government finances.
Political risk (HIGH): The antagonistic political system could slow down implementations of reforms and policy initiatives in the wake of the Cabinet resignation and the election that weakened the government’s majority. Succession to the 88-year-old Emir remains an issue.
Financial risk (LOW): The main risks for banks are adverse domestic political and geopolitical developments or renewed weakness in oil prices. Kuwait is being considered to join the MSCI emerging market index.
Commercial risk (MEDIUM): The country ranks in the middle of the World Bank’s Doing Business index but reducing excessive regulations would foster private sector opportunities, competition, and diversification.