Mubasher: Kuwait’s balance sheet is seen as the “strongest in the GCC”, however, undertaken austerity measures and the slowness in implementing the government’s development plan are likely to result in Kuwait being one of the ‘region’s weaker performers in 2018-2019’, Capital Economics said in a new report.

In 2016, Kuwait posted double-digit budget and current account deficits for the first time since the early 1990s, but shortfalls were “small” compared to other economies in the region, Capital Economics said, noting that Kuwait’s balance sheet is strong.

“While the government turned to the international bond market earlier this year to secure $8 billion of financing, public debt remains low at less than 20% of [gross domestic product] GDP,” the research firm noted, indicating that Kuwait’s FX savings amount to around $550 billion, representing 500% of GDP.

Despite this, Capital Economics forecasts Kuwait’s economic growth to be week in the coming few years, particularly amid projections that fiscal policy “looks set to be tightened.”

The Kuwait government is likely to “struggle” to carry on with its latest development plan, which commenced in 2015 and focuses on enhancing the country’s ailing business environment, considered the worst in the Gulf region.

Kuwaiti authorities “have a poor record of implementing development plans,” the research firm stated, indicating that according to reports, the Kuwaiti government has spent less than 60% of its allocated budget in the 2011-2014 plan.