Kuwait Times, Tuesday, Jan 03, 2023 | Jamadi Al Thani 9, 1444
Effects of reforms on Kuwait economy still unclear: Expert
Kuwait:
Economic researcher Mohammad Ramadan spoke to Kuwait Times about the economic
expectations for Kuwait for 2023, saying that due to the political instability
in the country and the economic situation that is not a priority for the
government, representatives or citizens themselves, therefore, it is hard to
predict the economic situation for the country in 2023.
He said although the country is witnessing clear indications of a decrease in
corruption in various governmental entities, the effect of these reforms on the
local economy is still unclear, as it depends on the type of reforms that the
new officials will achieve after take charge of various bodies in the country.
On oil prices, Ramadan said the current status globally is still foggy due to
the sudden decisions that could be taken by Russia and OPEC+, with the West
imposing sanctions, while expectations from international credit bodies vary
greatly, as some of them expect oil price in 2023 to be $80 to $90, while others
forecast prices will drop to $60 or $50 per barrel.
Ramadan pointed out Kuwait is still facing some basic issues that can change the
economic situation if approved, such as wage hikes, especially with the approval
of the government in principle, which will definitely affect the purchasing
habits of citizens and residents, and could determine which economic activity
will witness growth and therefore improve parts of the local economy.
“Improving capital spending is one of the most important annual promises the
government makes consistently, but administrative obstacles hinder spending and
disserve the results the country is waiting for, not to mention the local
economy suffers from a lack of development. Getting rid of these obstacles will
take the economy at a higher speed,” Ramadan said.
Kuwait’s economic growth indicators
Ramadan clarified there are some main indicators in Kuwait that determine the
economic status of the country, which is related to the Corruptions Perceptions
and Ease of Doing Business indices, in addition to the improvement of government
procedures. “The index reports will give us a clear view of the situation at the
beginning of the year and also help us predict what could happen in the economy
this year,” he said.
Zero-COVID Policy
After China decided to abandon its zero-COVID strategy, Kuwait Times asked
Ramadan how this can positively reflect on the Kuwaiti market. “It would benefit
Kuwait and the GCC area in general. China buys Russian oil at a cheap price and
dropped its zero-COVID policy, which will help the country to increase
production and reduce costs. This will lead to a decline in commodity prices and
reduce inflation,” he said.