Consumer spending to achieve strong growth

Fitch Solutions expects the consumer spending in Kuwait to achieve strong growth during 2022 and 2023, and it is likely that household spending in Kuwait will grow by 6.8% in 2022 and 2.6% next year, reports Al-Qabas daily.

Kuwait’s GDP will achieve a growth of 7.1% in this year, and 4.6% next year.

Fitch went on to say, the total spending of families in Kuwait in 2023 is expected to reach about 19.8 billion dinars, up from 18.9 billion dinars in 2022, knowing that the expectations in this regard about two months ago the total spending of families in the country in the current year will reach about 11.8 billion dinars compared to 10.7 billion dinars in 2021.

The agency said in a recent report that the growth of household spending in Kuwait in 2022 will be achieved due to the improvement of the epidemiological situation in the country after the launch of a successful vaccination campaign against Corona, which will reduce the risks of closures for the rest of this year and until 2023.

The agency noted that the expectations of the growth of household spending in Kuwait in the current year and next year are supported by the odds to postpone the introduction of the value- added tax until 2023 or 2024, amid concerns about inflation, geopolitical events and local political conditions.

The sources said the agency’s risk team expects the financial flexibility of the Kuwaiti government will lead to reduce the need for a new tax in the current year. Fitch Solutions added the positive outlook for consumer spending in Kuwait in the current year is in line with expectations for Kuwait’s GDP growth of 7.1% in 2022.