This profile takes stock of the trade performance and structure of Kuwait since 1995. In addition to aggregate trends in trade and foreign direct investment, a broad range of trade indicators are calculated specially for this profile using highly detailed product level data, making it a novel set of trade indicators for Kuwait and the Arab region.
The analysis reveals Kuwait’s performance in trade and attracting foreign direct investment over the past two decades have been weak. Kuwait’s merchandise exports, expressed as a share of GDP, have closely tracked developments in oil prices and its merchandise imports have been mostly steady in the 2000s and early 2010s and appear to have plateaued at a slightly higher level since 2015. Kuwait’s services trade, measured as a share of GDP, has been rather volatile over the past two decades, in part driven by fluctuation in oil prices and its impact on GDP. Net FDI inflows have been negligible, with the notable exception of the five-year period starting in 2008. Net FDI outflows, however, have been rather large and sustained since the mid-2000s.
Traditional destinations for Kuwait’s exports have mainly been PAFTA and ASEAN countries. PAFTA and sub-Saharan African countries hold relatively favorable prospects for Kuwait’s exports, which show limited extent of diversification and sophistication.