The Report: Kuwait 2025

Economy

Kuwait is continuing its efforts to transform the economy and diversify away from hydrocarbons. Guided by its long-term policy blueprint, New Kuwait 2035, the country’s efforts are centred on boosting private sector participation, digitalising key aspects of the economy and rolling out new infrastructure investment. With renewed momentum under Emir Sheikh Mishal Al Ahmad Al Jaber Al Sabah, Kuwait is implementing broad-based governance, judicial and economic reforms that are designed to improve efficiency, attract foreign capital and strengthen the foundations for sustainable and innovation-led long-term growth. A milestone was reached in 2025 with the passage of a new debt law widening the government’s financing options and enabling Kuwait to issue its first debt instruments in over five years. The outlook for Kuwait’s economy is positive, with the IMF revising its GDP forecast to 2.6% – driven by an expanding non-oil sector and the easing of OPEC+ production reduction limits.

Trade & Investment

Although Kuwait’s economy remains reliant on the hydrocarbons sector, diversification through trade and investment is a conduit for growth in the near-term. The government is pursuing a diversification agenda under its New Kuwait 2035 vision, which aims to bolster non-oil growth. This transition presents an opportunity to reinvigorate reform efforts in areas such as privatisation, public-private partnerships (PPPs) and foreign investment. Strengthening the business environment remains a priority, with renewed political alignment serving as a catalyst for accelerating diversification and boosting investor confidence. Recent amendments to foreign investment legislation, the expansion of PPP models and the planned rollout of special economic zones indicate a broadening of opportunities for private capital. The Kuwait Investment Authority continues to underpin fiscal resilience and global reach through its sovereign wealth holdings. Steady progress in investment facilitation, digitalisation of procedures and the development of new investment vehicles suggests that gains are likely across the board.

This chapter contains interviews with Sheikh Meshaal Jaber Al Sabah, Director General, Kuwait Direct Investment Promotion Authority; and Abdullah AlTerkait, Chairman, Al Safat Investment Company.

Banking

Economic growth, consolidation and new fiscal laws passed in 2025 are driving the banking sector’s growth, diversification and lending opportunities. Despite market uncertainty due to US tariff policy, oil market volatility and geopolitical tensions, domestic banks in Kuwait have remained resilient. Kuwait’s leading banks posted strong balance sheets and liquidity for 2024, with capital buffers above regulatory minimums, while positive growth in terms of net profit and total assets continued into the first half of 2025. Kuwaiti banks are poised for expansion, supported by capital and liquidity cushions and an accommodative monetary policy. The government has also signalled its commitment to supporting domestic banks – regardless of size or ownership structure – to maintain market confidence and stability. As a result, the positive trajectory of Kuwaiti lenders – marked by profitability and asset growth reported in 2024 – is expected to continue through 2025, providing a robust base for the economy. This chapter contains interviews with Basel Al Haroon, Governor, Central Bank of Kuwait; Isam Al Sager, Group CEO, National Bank of Kuwait; and Mai Al Owaish, CEO, Kuwait Credit Information Network Company.

Islamic Financial Services

The outlook for Kuwait’s Islamic financial sector is positive. Two banks, Kuwait Finance House and Warba Bank, have made acquisitions that will expand their reach domestically and lay the groundwork for expansion in other regional markets where Islamic banking is not as developed. The passage of Kuwait’s Public Debt Law in March 2025 will improve local banks’ liquidity and spur improvements in the local sukuk (Islamic bonds) market. Internationally, the growth of sukuk providers has been a boon for Kuwait’s Islamic banks, who have been bookrunners for significant amounts of issues in 2023 and 2024. Sectoral improvements, such as those carried out by the Insurance Regulatory Unit, and clarified guidelines for digital banks published by the Central Bank of Kuwait, are driving innovation and efficiency improvements. The insurance sector will see modest growth due to policies enacted in the early 2020s while growing competition may lead to consolidation. This chapter contains an interview with Khaled Yousef Al Shamlan, Group CEO, Kuwait Finance House.

Capital Markets

With the first half of 2025 witnessing annualised traded values and volumes almost doubling, and its market capitalisation surging by nearly a quarter, this has been a banner year for Boursa Kuwait. In the first six months of the year, double-digit gains in Boursa Kuwait’s Main Market and Premier Market allowed the country to outperform all of the GCC’s exchanges, apart from Dubai Financial Market. By the end of the third quarter, Boursa Kuwait had outperformed Dubai’s exchange to lead the GCC in year-to-date results. Kuwait has entered a period of structural reform in its economy, tackling bottlenecks hampering investment. Boursa Kuwait will benefit, with projects requiring financing and unfreezing of the sovereign debt market. The Market Development Programme increases the global competitiveness of the capital market. Using international best practices in regulation and organisation, the programme should see securities, bonds, sukuk and ETF infrastructure improve. This chapter contains interviews with Mohammad Saud Al Osaimi, CEO, Boursa Kuwait; Faisal Mansour Sarkhou, CEO, Kamco Invest; and Ali Khalil, CEO, Kuwait Financial Centre (Markaz).

Insurance

Kuwait’s insurance and takaful (Islamic insurance) sector has shown resilience in recent years, continuing to record profit and policy growth despite an uncertain global economic outlook. The period ahead looks set to be marked by a further series of regulatory reforms, as the Insurance Regulatory Unit seeks to bring the sector further into line with international best practices. At the same time, new developments in digitalisation are expected to roll out in motor third-party liability and health. Broader economic, fiscal and structural reforms and projected economic growth are likely to drive demand and investment in the months ahead. This should boost insurance and takaful uptake, both on an individual and corporate level. There is strong competition, with this leading to stronger, more consolidated players. This chapter contains an interview with Ali Al Hendal, CEO, GIG Kuwait.

Energy

The energy sector continues to dominate the Kuwaiti economy, with oil rents making up the vast majority of government revenue and GDP. Income from oil has declined since the peak directly after the conflict in Ukraine, though the unwinding of production cuts by the Organisation of the Petroleum Exporting Countries will bring some additional income. Growing domestic energy demand has caused a rise in liquefied natural gas imports, though the country’s refining sector is set for growth after the new Al Zour refinery became fully operational in 2024, localising more of the petrochemical value chain. KPC, the parent company of the country's upstream, midstream and downstream energy organisations, has announced plans to consolidate its eight subsidiaries. The utilities sector has grown its production capacity, though heat waves continue to cause power cuts. The first utility-scale renewable energy project will be connected to the grid by the end of the decade. This chapter contains interviews with Tareq Al Roumi, Minister of Oil; and Chairman, Board of Directors, Kuwait Petroleum Corporation (KPC); Ahmad Jaber Al Eidan, CEO, Kuwait Oil Company; and Sheikh Nawaf Saud Al Sabah, CEO, Kuwait Petroleum Corporation.

Transport & Logistics

Kuwait is undergoing a large-scale drive of infrastructure development as part of a broader mission to diversify its economy and reduce its reliance on hydrocarbons revenue, a goal encapsulated by the ambitious and far-reaching New Kuwait 2035 long-term development plan. One key objective of the roadmap is to upgrade the country’s infrastructure. As such, major projects in public transport networks, airport capacity and port facilities are under way, with a view to presenting Kuwait as a leading regional destination for trade and travel. Kuwait’s portfolio of transport projects underscores its aim to become a logistics centre. Efforts to reduce road congestion through investment in public transport reflect a dual goal: improving quality of life and creating a more efficient business environment. Coupled with regulation, transparency and global partnerships, these measures bring Kuwait closer to its vision of becoming a destination for global enterprise.

Construction & Real Estate

Kuwait’s construction and real estate sectors showed renewed signs of growing momentum in 2025. The Fourth Kuwait Master Plan 2040, the long-term national economic diversification plan that was launched in September 2023, underpins growth in both sectors as the government spearheads infrastructure mega-projects and the building of new residential cities. Kuwait is increasingly turning to the private sector and seeking public-private partnerships (PPPs) to fund housing developments and transport and renewable energy projects, with Chinese firms playing a more prominent role. Domestic labour shortages and elevated costs of construction materials create challenges. However, on the back of momentum gained in 2025, coupled with forecasted real GDP growth, new far-reaching reforms and projected rising private investment, the sectors are poised for future expansion. This chapter contains interviews with Abdulatif Hamed Hamad Al Mishari, Minister of State for Municipal Affairs and Minister of State for Housing Affairs; and Abdulaziz Ghazi Alnafisi, CEO, Salhia Real Estate Company.

Industry

Kuwait’s industry sector occupies a key position in the country’s diversification agenda, balancing the challenges of global market volatility with domestic priorities for sustainable growth. The sector has been reshaped by regulatory modernisation, infrastructure investment and strategic initiatives aimed at reducing reliance on hydrocarbons. Although manufacturing remains a relatively modest contributor to GDP, the government has placed industry at the heart of its New Kuwait 2035 roadmap and National Industrial Strategy 2035, which seek to elevate value-added production, attract foreign direct investment and expand employment opportunities. Kuwait’s industry sector enters 2026 positioned between continuity and transformation. Anchored in chemicals and steel, the sector is expanding into pharmaceuticals, food and advanced manufacturing. While headwinds – including inflationary pressures, labour challenges and regional competition – persist, ongoing infrastructure projects, rising foreign direct investment and policy reforms provide momentum for growth

ICT

Kuwait’s ICT and telecommunications landscape is undergoing a transformative period under New Kuwait 2035. Policy actions — the phasing out of 3G networks, new data protection rules and the rollout of fibre-optic broadband — are reinforcing the digital foundation. Projects like Microsoft’s artificial intelligence-powered Azure Region and the Fibre in the Gulf subsea cable signal momentum in international connectivity and cloud capabilities. With near-universal internet access and record-high mobile speeds, Kuwait is positioning itself as a digital leader. Market value is projected to reach over $32bn by 2030, and double-digit expansion is predicted for segments such as IT security and cloud services. The government’s emphasis on fibre broadband and 5G advanced networks will drive connectivity. Business confidence in digital infrastructure is improving through cybersecurity measures and talent development. In the nascent start-up ecosystem, new funding rounds for fintech and logistics ventures combined with accelerators like Zain Great Idea, signal investor interest. This chapter contains interviews with Omar Al Omar, Minister of State for Communication Affairs; Alaeddine Karim, Country General Manager, Microsoft Kuwait; and Abdulaziz Al Babtain, CEO, Ooredoo Kuwait.

Education & Health

Education reform and the overhaul of both the Ministry of Education and the national curriculum are expected to strengthen academic outcomes in Kuwait. In parallel, sustained government prioritisation of health care has helped modernisation through new infrastructure, improved access to services and enhanced training for medical professionals. As the country confronts the pressures of an ageing population, policymakers are emphasising preventive care – particularly the management of chronic diseases – in line with the objectives of New Kuwait 2035. Together, reforms in education and health care represent an important step in supporting the transition towards a more diversified, competitive and knowledge-based economy. Investment in digital learning, curriculum modernisation and international partnerships will narrow skills gaps and improve graduate readiness for an evolving labour market. In health care, expanding infrastructure, greater digitalisation and wider adoption of advanced technologies will improve service quality and open the door to greater private sector participation. This chapter contains an interview with Jalal Al Tabtabaei, Minister of Education.

Tourism, Culture & Sport

Tourism, culture and sport are emerging as pillars of Kuwait’s economic diversification strategy, supporting efforts to broaden national income sources beyond hydrocarbons. As part of New Kuwait 2035, policymakers are investing in cultural institutions, recreational infrastructure and modernised sports facilities while encouraging private sector participation. Kuwait’s visitor economy remains selective: while international leisure tourism is limited, the country hosts a steady flow of regional business travellers, medical visitors and short-stay GCC nationals. Visitor numbers have recovered following the Covid-19 pandemic, supported by the restoration of airline routes, improved entry procedures and the revival of business activity. Looking ahead, the sector is expected to expand gradually as reforms and investment strengthen Kuwait’s cultural and recreational offerings. The opening of Terminal 2 at Kuwait International Airport will enhance connectivity and passenger capacity, while the rehabilitation of historic districts and archaeological sites is set to reinforce Kuwait’s positioning as a regional cultural centre.

The Guide

The Guide contains a selection of hotel and accommodation options throughout Kuwait for both business and leisure travellers. Helpful information is provided on visa regulations, safety and health considerations, business etiquette, and public and private transport options.

Table of Contents

There are no articles in this chapter. To view the Table of Contents, please click here.