The recession in 2017 should be a one-off but Kuwait still faces risks relating to the geopolitical and domestic political backdrop and the commercial environment.
Economic risk (MEDIUM): Kuwait faces a downward blip that increases the need to deliver on plans for economic reform to diversify its economic base. However Kuwait has found it difficult to diversify away from oil.
Political risk (HIGH): Political tensions in Kuwait have heightened, as relations between the country’s parliament, cabinet, and monarchy remain strained. Kuwait’s role as a broker between the Saudi Arabian bloc and Qatar risks recriminations from both sides.
Financial risk (LOW): The financial and banking systems are seen as stable thanks to a raft of new regulations, while the country has substantial foreign reserves.
Commercial risk (MEDIUM): The country ranks in the middle of the World Bank’s Doing Business index and the government has embarked on reforms. The World Bank has also approved progress on business reform.