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Capital City: Kuwait |
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It is %T:%M %A in Kuwaďt City
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Economic trends
Kuwait has a small but relatively open economy dominated by the oil industry and government sector. It has the 3rd largest oil reserves in the world, after Saudi Arabia and Iraq. Oil production generates around 90% of the state revenue. The country’s economy has benefited substantially because of the Operation Iraqi Freedom launched by the USA because many companies working in Iraq have established offices in Kuwait and procured goods through Kuwaiti companies. The GDP growth rate is declining: 5.0% and 3.5% reaching respectively in 2006 and 2007, and 4.8% forecasted for 2008. The country has two major sources of income: payment of war damages by Iraq and revenue from overseas financial investment. Both inflation (estimated at 2.6% in 2007) and unemployment rate (less than 2%) are under control.
Main branches of industry
Agriculture activity is very limited due to lack of water and arable land. Agriculture contributes less than 1% to GDP. However large-scale commercial fishing has been undertaken. The state owned company named Kuwait Oil Company (KOC) has monopoly over oil exploitation across the county. Huge deposits of natural gas complement Kuwait's oil production. Industry in Kuwait consists of several large export-oriented petrochemical units and oil refineries. Other activity areas include food processing, desalinization, building & construction, and the manufacturing of electronic products, cement, textiles, and fertilizers. FDI into the country is encouraged by allowing foreign companies to hold 100% capital stake; besides providing attractive tax benefits. The services sector contributes nearly 45% to GDP. The public company Kuwait Oil Tankers Co. is the largest tanker company in the OPEC countries.
International trade
Kuwait is highly dependent on foreign trade. The share of foreign trade in country’s GDP is nearly 95%. The Kuwaiti ‘dinar’ is a strongly pegged to the U.S. dollar. Kuwait runs a substantial balance-of-payments surplus. Its top three export partners are: Japan, the USA and the Netherlands. Besides mineral fuels & oils which represent 90% of the country's total exports, other products being exported are plastics, fertilizers, vehicles, and electric & electronic equipment. The top three import partners are: the USA, Germany and Japan. Kuwait mainly exports vehicles, machinery, electric & electronic equipment, food products, and apparels. 90% of the consumer goods are imported.
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