Discusses key economic indicators and trade statistics, which countries are dominant in the market, the U.S. market share, the political situation if relevant, the top reasons why U.S. companies should consider exporting to this country, and other issues that affect trade, e.g., terrorism, currency devaluations, trade agreements.
Last Published: 7/24/2017
Kuwait is situated in the northeast corner of the Arabian Peninsula, at the head of the Arabian Gulf. Bordered to the north and west by Iraq, to the south and west by Saudi Arabia and to the east by the Arabian Gulf, Kuwait occupies a strategic position in this vital region. Kuwait is a member of the six-nation Gulf Cooperation Council (GCC). About one-third of an estimated population of 4 million are Kuwaiti nationals. The remainder consists of expatriate residents hailing from more than 80 countries. The oil industry and government sector dominate the economy, with crude oil reserves estimated at nearly 101.5 billion barrels, approximately 7% of the world’s reserves. The oil industry accounts for over half of GDP and 94.4% of government revenues. With oil the main natural resource, oil refining and downstream petrochemical processing are the dominant industries. Non-petroleum-related manufacturing and agriculture sectors are limited, consisting of a switch-gear manufacturer for power sub-stations, and factories for building materials, furniture, and food packaging.
 
The 2003 ouster of Saddam Hussein in Iraq stimulated local confidence in Kuwait’s economic and security situation. In 2010, the parliament passed a five-year $104 billion development plan that aimed to upgrade infrastructure and diversify the economy away from oil. In 2015, the government adopted a new development plan (2015-2020) that focused on economic reform and the implementation of several long-stalled mega-strategic projects that were not implemented under the preceding plan. While government-funded major projects move slowly, some major projects have moved forward in recent years.
 
Kuwait imports most of its capital equipment, processed foods, manufacturing equipment, and consumer goods. Two-way trade is limited to a few international partners. Almost half of the country’s imports originate from China, the United States, the UAE, Japan, and Germany, while over 50% of Kuwait’s export earnings are attributable to South Korea, China, India, Japan, and the United States. The United States remains a leading and strategic trade partner. Imports from the United States in 2016 were valued at $3.3 billion, a 22% increase from $2.7 billion in 2015.  Kuwaitis frequently travel to the United States (with approximately ten percent of Kuwaiti high-school graduates continuing their education at U.S. colleges and universities), and Americans and American brands and products are warmly welcomed in this small economic powerhouse. Although Kuwaitis are extremely price-conscious, they are also avid consumers. While Chinese and Indian goods increasingly dominate low-end imports, U.S. exports are relatively competitive in Kuwait.
 
According to the Central Bank of Kuwait, Kuwait’s nominal GDP was $112.553 billion in 2015.  The World Bank assesses that Kuwait’s economy slowed by 2% in 2016 due to low oil prices. Kuwait's current oil production capacity is estimated at 3.150 barrels per day. The government hopes to increase production capacity to 4 million barrels per day by 2020. In order to reach this goal, Kuwait must continue spending heavily on upgrading downstream facilities as well as on upstream oil development over the next five years.
 
Transportation equipment, including automobiles and automotive parts, accounted for 42 percent of non-military U.S. exports to Kuwait in 2016. Oil and gas field equipment, telecommunications and IT equipment, medical equipment, and electronics were also leading export sectors for U.S. firms.

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Kuwait Trade Development and Promotion