Kuwait’s economy: IMF predicted 3.8% growth for 2026, then the forecasts split
Editorial
Before the 2026 war the IMF expected Kuwait's economy to grow 3.8%. After it, forecasts range from a 6.4% fall to a 13% fall.
+3.8%IMF forecast for 2026 growth (23 Feb 2026, before the war)
-4.6%Real GDP, Q1 2026 (preliminary)
-12.5%Oil GDP, Q1 2026 (42% of GDP)
+1.9%Non-oil GDP, Q1 2026
2.3%Average inflation 2025 (IMF)
The forecasts were made at different times and on different assumptions about the Strait of Hormuz.
The IMF's pre-war picture
| Indicator | 2023 | 2024 | 2025 | 2026 (IMF) | 2027 (IMF) |
|---|---|---|---|---|---|
| Real GDP growth, % | -1.7 | -2.6 | 2.6 | 3.8 | 2.5 |
| Oil GDP growth, % | -4.2 | -6.9 | 2.4 | 4.7 | 2.0 |
| Non-oil GDP growth, % | 1.0 | 1.8 | 2.7 | 3.0 | n/a |
| Average inflation, % | 3.6 | 2.9 | 2.3 | 2.1 | n/a |
| Fiscal balance, % of GDP | 0.9 | -2.4 | -7.1 | -9.3 | -9.8 |
| Current account, % of GDP | 31.1 | 29.1 | 23.6 | 19.6 | 18.1 |
| Gross government debt, % of GDP | 14.7 | 24.2 | 28.9 | n/a | n/a |
| Nominal GDP, $ billion | 165.4 | 160.2 | 156.6 | 159.5 | 166.3 |
| Population, million | 4.9 | 5.0 | 5.1 | n/a | n/a |
Source: IMF 2025 Article IV press release, 23 February 2026.
First quarter of 2026
Source: Kuwait Times on preliminary official estimates. Q1 included only one month of the conflict.
What the IMF recommended
- Consolidate the budget by about 1% of GDP a year over the next decade.
- Introduce a 5% VAT, extend the 15% corporate income tax to all domestic companies and add a GCC-wide excise tax.
- Cap public hiring and reduce the public-sector wage premium.
- Raise fuel, electricity and water prices toward GCC averages, with targeted cash transfers.
- Adopt a fiscal rule with a debt ceiling and publish a medium-term debt strategy.