Kuwait central bank forecasts GDP growth of up to 5 per cent in 2010

25 March 2010

Worst is over for banks, central bank governor says

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.

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