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Kuwait GDP exceeds KD 34 million – Growth rate of total labor force hits 4.8%

KUWAIT: Photo shows the entrance of Central Bank of Kuwait in Kuwait City. — KUNA
KUWAIT: Photo shows the entrance of Central Bank of Kuwait in Kuwait City. — KUNA

KUWAIT: Kuwait’s Gross Domestic Product (GDP) exceeded KD 34 million in 2015, declining some 25 percent compared to the previous year, according to the Central Bank of Kuwait. The GDP at current prices amounted to KD 34,314.6 million during 2015 (ie a decline of 25.9% compared to 2014). Inflation rate, measured by the relative change in the General Consumer Price Index (CPI), was 3.3% during 2015 against 2.9% during 2014, the CBK said in its annual economic report for 2015, publicized yesterday.

Available statistics indicate a deceleration in the growth rate of Kuwaiti population to 2.5% during 2015 compared to 2.7% during 2014, while the growth rate of non-Kuwaiti population increased to 4.1% from 3.4% during 2014. Furthermore, the growth rate of total labor force in Kuwait reached to 4.8% during 2015, while the growth rate of Kuwaiti labor force increased to 3.2% from 2.9% during 2014. Moreover, the statistics indicate an increase in non-oil GDP at current prices during 2015 by 3%, while oil GDP recorded a decline of 46.2%.

The report noted a sustained relative stability in the KD exchange rate against major currencies during 2015, as part of the prevailing exchange rate policy, pegging the KD to an undisclosed special weighted basket of currencies of countries that have significant trade and financial relations with the State of Kuwait. On the other hand, Money supply in its broad definition (M2) and the resident private sector deposits with local banks realized a slower pace of growth of 1.2% and 1.3% respectively at the end of 2015.

Moreover, the CBK continued its efforts in managing domestic liquidity levels during 2015 using its available monetary policy instruments, mainly accepting deposits from local banks, issuing CBK bonds and managing public debt instruments on behalf of the Ministry of Finance. Local banks’ claims on the CBK witnessed a noticeable decline of 18.7% to KD 4,695.8 million at the end of 2015.

Banking supervision
In the area of banking supervision and oversight efforts – aimed at enhancing the financial position and maintaining financial stability of the financial sector – the CBK continued its efforts during 2015 through issuing and overseeing the implementation of its directives particularly those related to the latest Basel III regulations issued by the Basel Committee on Banking Supervision. These regulations strengthened and enhanced the quality and quantity of regulatory capital, liquidity framework through the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR), leverage D-SIBs, and the disclosure and transparency enhancements.

Within this context, the CBK has also issued Consumer Protection Guide instructions in light of the growing interest in recent years in the issue of consumer protection in financial services industry, particularly with the steady expansion of electronic services and the increasing chances of transferring risks to clients in various sectors.

The CBK continued its efforts in managing domestic liquidity levels during 2015 using its available monetary policy instruments, mainly accepting deposits from local banks, issuing CBK bonds and managing public debt instruments on behalf of the Ministry of Finance. Local banks’ claims on the CBK witnessed a noticeable decline of 18.7% to KD 4,695.8 million at the end of 2015.

The report points out developments in the financial indicators of the banking and financial system, in light of data on aggregate financial statements of various banking and financial units supervised by the CBK, including local banks, finance companies and exchange companies. Within this framework, the aggregate balance sheet of local banks amounted to KD 58,595.1 million at the end of 2015, realizing a growth of 5.7% as compared to KD 55452.3 million at the end of the previous year.

On the other hand, the aggregate balance sheet of local investment companies totaled KD 9,827.5 million at the end of 2015, recording a decrease of 6.1% from KD 10465.3 million at the end of 2014. In addition, the aggregate balance sheet of local exchange companies registered with, and supervised by, the CBK amounted to KD 153.7 million at the end of 2015 with a decrease of 0.1% from KD 153.9 million at the end of the previous year.

State public finance
The report highlights developments in the State’s public finance, whereas the general budget recorded an actual surplus of KD 3,510.5 million during FY2014/2015, ie a noticeable decrease of 72.8% compared to the previous fiscal year, before the deduction of allocations for the Reserve Fund for Future Generations (RFFG). The fourth part of the Report highlights developments in the State’s public finance, whereas the general budget recorded an actual surplus of KD 3,510.5 million during FY2014/2015, ie a noticeable decrease of 72.8% compared to the previous fiscal year, before the deduction of allocations for the Reserve Fund for Future Generations (RFFG).

The fifth part of the Report reviews the developments in the trade and financial relations of the State of Kuwait with other economies as reflected in the statistics on the foreign trade and the Balance of Payments (BOP) of the State of Kuwait during 2015. The realised surplus in the balance on goods witnessed a decline of KD 13,639.7 million or 61.8% during 2015. Likewise, the current account surplus decreased by KD 13,682.0 million or 88.4%. As a result, the overall position of the BOP realized a total deficit of KD 885.9 million in 2015.

Surplus decreased
The report covers the developments witnessed in the performance of the Kuwait Stock Exchange (KSE) during 2015 as reflected in the key trading indicators, price movements and the factors affecting the KSE’s performance. The realized surplus in the balance on goods witnessed a decline of KD 13,639.7 million or 61.8% during 2015. Likewise, the current account surplus decreased by KD 13,682.0 million or 88.4%. As a result, the overall position of the BOP realized a total deficit of KD 885.9 million in 2015.

Lastly, the report covers the developments witnessed in the performance of the Kuwait Stock Exchange (KSE) during 2015 as reflected in the key trading indicators, price movements and the factors affecting the KSE’s performance. In this context, the KSE Price Index (PI) closed at a decline of 14.09% at the end of 2015 compared to the closing of 2014. In addition, the KSE Weighted Price Index (WI) recorded a decrease of 13.03% at the end of 2015 compared to 2014. – KUNA

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