The governor of Kuwait’s central bank expects the emirate’s gross domestic product (GDP) to grow by between 4 and 5 per cent in 2010 after an estimated contraction of 1.5 to 2 per cent in 2009.

“We think Kuwait’s GDP will expand by 4 to 5 per cent in 2010,” said Sheikh Salem Abdulaziz al-Sabah at a news conference on 24 March.

The worst is over for Kuwaiti banks, Al-Sabah said, adding he expected to see more credit growth in the coming period.

Asked whether Kuwaiti banks would continue booking provisions in 2010, Sheikh Salem said: “This depends on the quality of the credit portfolio and whether there are more defaults or not.”

Kuwait’s parliament passed a $100bn-plus four-year development plan on 2 February, with the aim of reducing its dependence on oil revenues and stimulating private sector participation in projects.

The funding is expected to be used to kick-start the development of the new Silk City business hub at an estimated cost of $77bn, as well as the upgrade of the country’s energy grid and the construction of a 25-km container harbour.

The plan also includes a railway and metro system, and additional spending on infrastructure, particularly in health and education.