According to a recent report by the Oxford Business Group, Kuwait commenced 2024 from a position of economic strength, benefiting from improved financial balances and increased foreign investments, reports Al-Qabas daily. Economic policymakers have been presented with opportunities since late 2023 to promote sustainable long-term growth, although these efforts may be hindered by prevailing challenges in local markets. Looking forward to 2024, Kuwait’s economic landscape is expected to be characterized by both obstacles and potential gains. Challenges such as decreased oil demand and political issues may pose hurdles, but overall, Kuwait’s financial prospects remain positive due to enhanced financial and external balances.

The report highlights opportunities for the Kuwaiti economy, particularly in financial and structural reforms, diversification, and strategic investments. Initiatives such as the launch of a development fund and a four-year government work program are seen as crucial steps towards stimulating the economy and attracting investment. However, realizing the full potential of these opportunities depends on resolving political differences and implementing significant reforms, including the introduction of new taxes. Internal economic challenges and delays in necessary financial and structural reforms could lead to an unbalanced financial policy and erode investor confidence. Political stagnation may hinder the acceleration of reforms necessary to enhance investor confidence and stimulate the private sector.

Despite these challenges, Kuwait maintains positive financial expectations, having improved its public fi- financial balances and increased external financial reserves. Efforts to diversify the economy are crucial, with a focus on enhancing non-oil revenues and investment spending to support economic growth. Measures to increase revenues may include imposing excise and value-added taxes, expanding the scope of income taxes, and reducing government expenditure on wages and energy subsidies. While imposing a value-added tax may not currently be on Kuwait’s agenda, the government aims to implement corporate taxes in 2024. Structural policies aimed at diversifying the economy, alongside reforms in governance and investment in infrastructure and service sectors, are essential for Kuwait’s economic growth and transition towards a more sustainable and diversified economy.

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