Kuwait Boosts Tourism With The Economy Recovering
Kuwait Promotes Tourism As The Economy Recovers
Kuwait, part of the Gulf Cooperation Council, holds the position of the third-largest economy within the region. In 2022, Kuwait's economy bounced back, experiencing an 8.2 percent rise in its actual gross domestic product (GDP) growth. However, the following year, there was a significant slowdown in nominal growth, reaching only 0.1 percent.
Based on a report from MEED, the sluggish performance can be attributed more to the decline in the country's oil production rather than a shift in the economy.
Kuwait, a significant oil producer within OPEC and one of the top ten global producers has recently declared its intention to decrease its oil exports by 128,000 barrels per day. This strategic move aims to bring stability to oil prices.
The country's oil production in May and June stood at 2.55 million barrels per day, which represents a decrease compared to April's daily output of 2.65 million barrels.
Kuwait is experiencing robust growth in its sectors outside of oil, despite the oil-related fluctuations in the country.
According to MEED, the non-oil GDP of the country experienced a growth of four percent in 2022. It is projected that this figure will further increase by 3.8 percent in the current year. Conversely, the World Bank predicts a 4.4 percent rise in the non-oil economy.
The budget for 2023-24 in Kuwait has been formulated conservatively, factoring in an average oil price of $73.1 for 2023 and $68.9 for 2024. These projections are in line with the estimates made by the International Monetary Fund (IMF), taking into consideration the spot price of approximately $80 in July 2023.
The objective is to maintain prices at an elevated level, with the potential to exceed the budgeted levels. However, given the decline in Kuwait's imports and exports, there are worries about the condition of global trade and commodity prices.
MEED's report emphasized the need for prompt financial and structural reforms in light of the uncertainty surrounding various scenarios. It expressed hope that the formation of a new parliament and government could serve as a turning point in resolving the political deadlock, thereby enabling the necessary fiscal and structural reforms required by the country.
The IMF issued a cautionary statement regarding significant risks to the country's economy. They highlighted that the impasse between the government and parliament is obstructing crucial fiscal reforms.
Kuwait Tourism Is On The Rise
Kuwait is actively seeking to diversify its sources of revenue and reduce its dependence on oil, with tourism being considered a promising option. Over the period from 1995 to 2020, the average revenue generated from tourism in the country amounted to approximately $562.19 million.
The World Travel and Tourism Council's report reveals that in 2021, the travel and tourism industry accounted for 4.3% of the national economy in Kuwait. Moreover, it generated a significant number of jobs, specifically 121,700, constituting 5.7% of total employment opportunities in the country during that period.
The directorate-general of Civil Aviation and the Director of Kuwait International Airport's Air Transport Department, Abdullah Fadous Al-Rajhi, has announced that Kuwait International Airport (KIA) is projecting a 13% growth in passenger traffic for this summer. Additionally, a 15% increase in aircraft movements is anticipated.
Summer 2023 has seen a notable increase in the number of passengers, with 5.75 million individuals having already traveled compared to last year's 5.07 million. Additionally, there has been an increase in flight operations, with 45,000 flights recorded this season, up from 39,000 in the previous period.
For the year 2023, the projected number of passengers is approximately 15.5 million. This represents a notable growth compared to the 12.46 million arrivals and departures recorded in 2022.
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