Consumer spending in Kuwait to grow nearly 7% in 2022

This is thanks to eased restrictions and low jobless rate amongst others. 

Consumer spending in Kuwait is expected to grow by 6.8% year-on-year in 2022 and by 2.6%YoY in 2023, Fitch Solutions reported. 

This will likely be driven by the easing of COVID-19 restrictions and elevated oil prices. The low and stable unemployment rate is also seen to contribute to the growth projection. 

“The positive growth in Kuwait's real household spending in 2022 will be due to Kuwait's improving epidemiological situation following a successful Covid-19 vaccination rollout,” Fitch noted.

“We believe that this will reduce the risk of further stringent lockdowns for the rest of 2022 and into 2023.”

In an earlier report, Fitch projected a 6.2%YoY growth for the full year of 2022. 

Household spending is projected to amount to US$61.9b, up from US$59.1b in 2022. Fitch added that the deceleration will bring back household spending to the medium-term trajectory seen pre-pandemic. 

The forecast is also hinged on the expectation that the imposition of a new value-added tax will be postponed until 2023/24. 

“In other countries across the Gulf Cooperation Council that have implemented VAT, we have tended to see inflationary pressures, eroding consumer real purchasing power in the first year,” the report also read. 

“However, Kuwait’s latest budget contains no reference to VAT and our Country Risk team expects the government’s improved fiscal flexibility will limit the need for a new tax over 2022.”