Overview of Kuwait City

Economy of Kuwait City

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Although geographically small in size, Kuwait is incredible wealthy and has a fairly open and free economy, with self-reported crude oil reserves topping 105 billion barrels.

Petroleum accounts for just about half the country's GDP, 95% of its export revenues, and nearly all of the State's finical income. By 2014, the Government of Kuwaiti has committed itself to increasing its oil production to 4 million barrels per day (bpd). A massive surplus generated from high oil prices over the years, helped to shield Kuwait from an economic crisis in 2008. In 2010, the country posted its twelfth consecutive budget surplus.

Little has been done by the Kuwaiti Government to diversify and restructure its economy, in part due to the positive fiscal situation of previous years, but also due to the weak business climate. Furthermore, the poor relationship between the National Assembly (Parliament) and the executive branch has hindered any movement on economic reforms which might have helped to move the country forward. Nonetheless, in 2010 the government passed an economic development plan, pledging to spend up to $104 billion over the next 5 years, dramatically shifting the focus away from oil and hopefully, attracting more private investments from within the country and abroad. Many are worried that such a sudden and dramatic increase in spending will even work.

Kuwait's GDP for 2012 is estimated at 5.0 % and is expected to fall slightly to 4.6 % in 2013. For twelve years straight, the Government of Kuwait has ended the fiscal year with a substantial surplus, often beating the previous year's amount. For the year 2011/2012, the country ended the year with a 13.2 billion Kuwaiti Dinar ($46.99 billion) surplus.

Kuwait is heavily dependent on its petroleum reserves for income. Besides oil, other resources include natural gas deposits and fish. Both industries make up only a tiny fraction of Kuwait's income revenue each year. With the exception of fish, nearly all of Kuwait's food is imported, much of it coming from neighboring countries. Fruits and vegetables are plentiful and come from all over the world and are widely available in grocery stores and markets. Meat is mostly imported from Australia, New Zealand and USA. Some poultry is available locally, with some coming from Saudi Arabia. Milk is imported from Saudi Arabia, Some types of breads, sugars and vegetables such as cucumbers and tomatoes are grown and produced locally.

Some of Kuwait's major export trading partners include: (estimated from 2010) Japan 17%, South Korea 18.8%, India 15.1%, U.S. 7.6%, Singapore 8.1%, China 12.9% and Taiwan 11.9%. The country's import trading partners include (estimated from 2010): U.S. 10.8%, Japan 7.2%, Germany 7.6%, China 12%, Saudi Arabia 5.9%, Italy 4.4%, U.K. 3.2%, India 5.4%, U.A.E. 4.2%, and South Korea 4.2%.

Update 25/05/2013

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