Kuwait real GDP set to grow by 4.5% 

(MENAFN - Arab News) Kuwait's real gross domestic product (GDP) is predicted to grow by 4.5 percent in 2012 on increase in oil production and increased government spending, according to a report by Global Investment House (Global).

Kuwait's total government revenue is expected to reach KWD29.5 billion for 2011/12 while expenses even if they touch the usually budgeted high figure of KWD19.4 billion will amount to a budget surplus of KWD10.1 billion, the report said.

For 2012/13, estimates indicate a surplus in the range of KWD0.6 billion - 11.2 billion in our worst and best case scenario assumptions. All in all, Kuwait is predicted to post its fourteenth consecutive surplus in 2012/13, according to the report.

Regarding inflation, rate for the month of February 2012 stood at 3.8 percent vs. 5.3 percent in the same month last year. With pressure from international food and commodity prices expected to ease in coming months and a cautious domestic credit growth, inflation is expected to come down in the near term.

For 2012, IMF projects Kuwait's inflation to slow down to 3.4 percent while EIU estimates it to come down to 4.4 percent.

On the other hand, Kuwait stock market declined 19.8 percent YoY amidst global uncertainty and an internal political deadlock to reach 179.3 points at the end of 2011, the report said.

Investment Index was the biggest loser, shedding 30.4 percent of its value. Trading activity declined further during 2011 as trading volume and trading value shrank 49 percent and 52 percent, respectively.

The market capitalization of the entire market shrank by KWD6.9 billion or 19 percent YoY. However, there is a sharp increase in trading activity in 1Q-2012 (value traded up 94 percent QoQ and 17.2 percent YoY indicating increased investors' appetite and improved sentiment. Global General Index too is up 2.2 percent during the quarter, the report said.