Kuwait

Air traffic is rising steadily in Kuwait as the state continues to capitalise on growing volumes of international travellers, buoyed by heightened regional activity.

With the government planning a series of big-ticket infrastructure investments and demand for private sector real estate developments heating up, Kuwait’s construction sector could be a strong performer over the next few years. However, concerns regarding project delays may have a dampener effect on investor interest.

Recent data show that Kuwait’s tourism sector had a good summer, with its hotels outperforming those found in many other GCC markets. Both public and private industry stakeholders are keen to build up the market further, although the limited scope of Kuwait’s tourist offering could make meeting targets difficult to achieve, at least in the short term.

The latest data show that Kuwait’s GDP growth in 2012 was driven by a rapid rise in the oil sector, although the non-oil economy showed improvement. An uptick in consumer sentiment is set to support continued expansion in 2013, but Standard & Poor’s (S&P) says that long-term growth may be hampered by the government’s inability to meet its investment goals.

Income from Kuwait’s hydrocarbons sector looks set to rise this year as the country ramps up oil production on the back of growing demand both locally and overseas, particularly from Asia.

With rising demand for residential units starting to match interest in commercial space, Kuwait’s real estate sector appears set to see greater activity in the second half of the year. However, high prices and a shortage of supply in some segments may put a dampener on sales growth.