KUWAIT: The Central Bank of Kuwait (CBK) has published a statement on Thursday released by the International Monetary Fund (IMF) on the occasion of the conclusion of its mission's visit to Kuwait. The mission held discussions with the Kuwaiti authorities and the CBK officials during December 11-18, 2022. At the conclusion of the mission, the head of the IMF mission Yasser Abdih issued the following statement:

"Kuwait's economic recovery continues. Strong vaccination efforts and the authorities' swift and decisive responses to the COVID-19 crisis have allowed for the relaxation of all social distancing restrictions and supported economic recovery. Overall real GDP growth is estimated to have rebounded from -8.9 percent in 2020 to 1.3 percent in 2021. It is projected to further increase to above 8 percent in 2022, supported by increased oil production, high oil prices, and sustained improvement in domestic demand.

In 2023, growth is likely to moderate, reflecting slowing external demand and oil production cuts under the OPEC+ agreement. Direct adverse spillovers from the Russia's war in Ukraine have been contained so far given the limited trade and financial linkages with both countries.

"Inflation has been contained, benefiting from monetary tightening and limited passthrough from higher global food and energy prices supported by administered prices and subsidies. With higher oil prices and output, the overall fiscal and current account surpluses increased significantly from last year.

"With strong bank buffers and prudent oversight and proactive monitoring of financial risks by Central Bank of Kuwait, the banking system has weathered the recent shocks well. Banks continue to be well-capitalized and liquid, financial soundness indicators are healthy, and private sector credit growth remains strong.

"The authorities continue to implement measures to improve fiscal revenue collection and spending efficiency. Efforts are ongoing to promote digital transformation, advance financial technology, and invest in green energy.

"Nevertheless, the outlook is subject to uncertainties and risks surrounding the external environment, including potential impacts of monetary policy tightening in major advanced economies and further slowdown in global economic activity. And volatility in oil prices and production, stemming from external factors including the geopolitical environment, could weigh on activity and macroeconomic balances. Delays in key fiscal and structural reforms could amplify the risk of procyclical fiscal policies, and hinder progress toward more economic diversification and higher competitiveness.

"The IMF mission team expresses its appreciation to the authorities for their hospitality and the candid and productive discussions. We look forward to continuing our dialogue and close collaboration."

Note: End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF's Executive Board. This mission will not result in a Board discussion.