Kuwait

Momentum generated by a strong recovery in Kuwait’s real estate sector in early 2012 is expected to continue throughout the year. In February 2012, the National Bank of Kuwait revealed that real estate sales in January totalled KD318.1m ($1.14bn), a 64% year-on-year (y-o-y) increase, which represents the third-best level on record.

Thanks to growing global demand for plastics in 2011, Kuwait’s petrochemicals companies reported improved financial results last year. Moreover, the sector looks set to expand, with the government investing in new facilities and taking steps to ensure that the industry has a sufficient supply of natural gas.

The completion of a sizeable local tower project, continuing expansion of the country’s largest mall and moves by a major Kuwaiti retail firm into the UK market have underlined the rising growth and confidence in the domestic retail sector. This confidence is being seen in new investment and projects, with Kuwait’s largest mall and shopping centre, The Avenues, building a $500m extension scheduled for completion by September 2012.

Hopes are rising that January’s elections will end a period of economic uncertainty and allow the newly elected government to focus on increasing levels of foreign direct investment (FDI). Concern was mounting that Kuwait risked falling behind its regional rivals in attracting investment and diversifying its economy, despite surging oil revenues and solid growth last year.

Development of the health care sector remains a priority for Kuwait, with the government recently signing two agreements with foreign educational institutions that aim to improve training for the country’s medical professionals. While the goal of this type of international collaboration is to enhance the skills of local physicians who work at state-run facilities, the government is also taking steps to create private investment opportunities in health care.

Oil production in Kuwait continues to increase, having reached 3m barrels per day (bpd) as of early December. Output could expand further in the longer run, according to officials from the Kuwait Oil Company (KOC), which recently said that it would be necessary to tap into the country’s heavy oil reserves to reach its 4m bpd capacity goal by 2020. At the same time, the country is also looking abroad for additional energy sources.