• Economic News Updates

    Economic News Updates

    For each market we cover, OBG produces regular economic research available on our website, by email subscription and via RSS feed. Free to access, our Economic Updates are targeted at those looking for regular comment on key sector developments.

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Efforts to transform Kuwait’s logistics infrastructure are gathering pace following the announcement that the first phase of the $1.2bn Mubarak Al Kabir port development is on track for completion in the second quarter of 2014.

The local real estate sector continues to send out mixed messages. While Kuwait’s residential segment is clearly on the rise, other components of the market are struggling to rebound from the downturn in the property market in 2009 and, more recently, domestic political concerns.

The continued conservative approach of Kuwaiti banks, both Islamic and conventional, seems to be paying off, with a number of institutions posting strong returns for the third quarter and several banks reporting double-digit quarterly increases in net profits for the period.

As Kuwait moves to ramp up oil production, it is preparing to take advantage of rising demand in Asian markets and stable oil prices. However, there are concerns that the country could be draining off its hydrocarbons reserves quickly and spending too much on subsidies and social support schemes and not enough on investments.

In recent weeks, the Ministry of Communications (MoC) has ordered Kuwait’s internet service providers (ISPs) to reduce their pricing by at least 40%. While this move could boost the number of users, some industry participants say that it is the ageing, government-owned, fixed-line communications infrastructure and lack of a clear regulatory framework – and not elevated pricing – that is limiting market expansion.

The government has announced plans to increase allocations to a key investment fund although there are still questions on how this move will affect state spending at home. The decision to strengthen the investment fund comes at a time when the government is also seeking to boost the domestic economy through its latest five-year National Development Plan (NDP).