Oil reserves in Kuwait make up 8 percent of the oil reserves in the world and its economy significantly relies on oil-based revenue. The forecast reduction in the price of oil implies a weakening fiscal outlook, however, the economy may gradually recover supported by the still buoyant non-oil activity and infrastructure spending planned by the government.
Therefore, the key challenges are dependency on the oil sector and the implementation of major structural reforms towards the non-oil sector economy. Over the past two years, the non-oil sector economy has experienced a slight increase and there are plans to transform it in the future.
Kuwait ‘Vision 2035’ aims to transform Kuwait into a world-class financial and commercial centre, with the private sector leading economic activities, fostering competitiveness, and increasing productivity. The government will provide the necessary infrastructure and ensure there are an adequate legal framework and a positive business environment.
In line with ‘Vision 2035’, Kuwait has streamlined its regulations to attract foreign capital to invest in the non-hydrocarbon sectors. This is expected to help the country to diversify and if successful will attract more foreign capital in the future.
Kuwait was ranked 83 out of 190 during 2019 in terms of ease of doing business by the World Bank Group.
Kuwait made starting a business easier by eliminating the paid-in minimum capital requirement.
Kuwait strengthened minority investor protections by requiring an independent review of related-party transactions and clarifying ownership and control structures.
Kuwait is moving away from an oil-based economy (Kuwait’s non–oil growth expected to be 3% in 2019)
Kuwait is reducing subsidies, encouraging PPPs (public private partnerships) to finance infrastructure projects