The non-oil sector in Kuwait witnessed solid growth in the first quarter with the non-oil GDP bouncing back with a strong 4.7% year-on-year increase after a 2.3% fall in the previous quarter, according to a report by National Bank of Kuwait.

The improvement was driven by strong growth in the manufacturing sector (including oil refining), which rose 20% versus -9% in Q4 23, boosted by a base effect due to weakness a year earlier.

Marked growth improvements in retail and ‘other services’ (mostly real estate and business services) also helped, satted the country’s top bank in its report citing provisional CSB data.

Major volatility in the GDP data in recent quarters makes an assessment of the underlying trend difficult, it stated.

In its report, NBK said there was scope for the provisional full-year 2023 non-oil growth figure of -2.9% to be revised higher.

“But at the same time, performance at the start of 2024 is well above our full-year forecast of around 2.5% and if it persists, would put Kuwait at or near the top of the GCC growth league this year,” it stated.

“We do note however that the S&P Global PMI gauge for Kuwait has drifted slightly higher so far this year, providing some corroboration of better economic conditions. Other indicators such as credit growth, project awards and real estate activity have also picked up slightly” said the country’s top bank in the report.

Oil sector GDP meanwhile registered a steep decline of -9.8% y/y in Q1 (Q4 23 -6.4%) reflecting Opec-led supply cuts that pushed Kuwait’s crude production down to 2.41 mb/d through the quarter. Overall GDP growth stood at -2.7% y/y, better than -4.4% in the previous quarter, it added.