Kuwait pushes ahead with reforms as regional tensions reshape outlook

Kuwait is pressing ahead with a wide-ranging programme of economic reform and structural diversification even as escalating regional tensions reshape the Middle East outlook, according to The Report: Kuwait, published by Oxford Business Group (OBG). Key facts highlighted in the report include the landmark 2025 public debt law that restores Kuwait’s access to international capital markets and strengthens fiscal flexibility, hydrocarbons still accounting for approximately 44% of GDP and close to 88% of government revenue, a return to growth forecast of roughly 2.6% in 2025 after a 2024 contraction linked to OPEC+ production cuts, and inflation moderating to about 2.2%.

"The data and analysis contained in the report illustrate how Kuwait is building the foundations for a more diversified and resilient economy. From fiscal reform and capital markets development to infrastructure investment and digital transformation, the policy direction is consistent and the momentum is growing. The non-oil sector's steady expansion, alongside continued efforts to attract foreign investment, points to a broadening of Kuwait's economic base that will be of considerable interest to the international investment community," Oliver Cornock, OBG's Editor-in-Chief, said.

Context and recent policy moves

OBG’s report frames Kuwait’s reform effort as central to the New Kuwait 2035 national transformation strategy, combining fiscal reform, infrastructure expansion and greater private-sector participation. The 2025 public debt law is singled out as a pivotal development that has reopened access to international financing and increased fiscal flexibility—an important lever at a time when regional conflict could affect trade, energy markets and investor sentiment across the Gulf.

• Economic composition: Hydrocarbons remain dominant but non-oil sectors including financial services, transport, real estate and manufacturing are expanding steadily.
• Macro indicators: After a 2024 contraction tied to OPEC+ output cuts, growth is forecast to rebound to about 2.6% in 2025, while inflation has moderated to approximately 2.2%.
• Investment climate: The report documents strengthening investor confidence amid regulatory reforms, growing capital markets activity and rising foreign investment interest.
• Strategic projects: Major infrastructure projects in transport, logistics and urban development were highlighted as part of efforts to position Kuwait as a regional trade hub.

Jana Treeck, OBG's Managing Director for the Middle East, said the report arrives at a significant moment in Kuwait's economic development. "Kuwait is entering a new phase of reform-driven growth, underpinned by a clear national strategy and a strengthening regulatory environment," Treeck said.

Outlook

OBG’s analysis underscores that while hydrocarbons will continue to dominate fiscal receipts—accounting for close to 88% of government revenue—the steady expansion of non-oil sectors and reforms to capital markets and public finances are intended to widen the economic base. The report includes sector-by-sector assessments and interviews with senior officials, including Sheikh Ahmad Abdullah Al Ahmad Al Sabah (Prime Minister), Basel Al Haroon (Governor, Central Bank of Kuwait), Sheikh Meshaal Jaber Al Sabah (Director General, Kuwait Direct Investment Promotion Authority), Tareq Al Roumi (Minister of Oil and Chairman, Kuwait Petroleum Corporation) and Abdulatif Hamed Hamad Al Mishari (Minister of State for Municipal Affairs and Housing Affairs).

Produced in partnership with the Kuwait Direct Investment Promotion Authority (KDIPA) and the Union of Investment Companies, The Report: Kuwait is available in print and online at https://oxfordbusinessgroup.com/reports/kuwait/2025-report/ and is positioned as a resource for investors and policymakers monitoring Kuwait’s reform trajectory amid an uncertain regional environment.