The Central Bank of Kuwait announced the end of the mission of the IMF experts in Kuwait, which was conducted via the Internet during the period from 4 to 8 April this year, within the framework of the preliminary periodic consultations for the year 2021, in accordance with Article 4 of the agreement establishing the fund.
In a press statement, the Central Bank said that in coordination with the International Monetary Fund and the local authorities concerned, it undertook the arrangements for that visit, including collecting information and data, and arranging meetings with senior officials in governmental and non-governmental agencies, to discuss the economic conditions, financial policy, monetary policy, and the strength of the sector. Banking and finance.
The final statement of the fund’s mission praised the efforts of the Central Bank of Kuwait to enhance the strength of the banking and financial sector and to further fortify it. The Governor of the Central Bank of Kuwait, Dr. Muhammad Al-Hashel, The mission commended the Central Bank of Kuwait for the continuous proactive monitoring of credit risks, and the efforts made to strengthen the regulatory and supervisory frameworks aimed at enhancing financial stability.
The “Monetary Fund” said that despite the shocks that the Kuwaiti banking sector faced during the year 2020, the sector remains resilient and enjoys a good level of capitalization and liquidity thanks to the prudent supervisory role of the Central Bank of Kuwait.
The governor explained that the closing statement of the mission highlighted the nature of the structural challenges facing the Kuwaiti economy and ways to address them, and noted the Kuwaiti authorities ’rapid and decisive action to address the health and economic impacts of the Coronavirus pandemic despite the grave challenges posed by the pandemic.
As is the case in other Gulf Cooperation Council countries, the repercussions of the Corona pandemic, in addition to the oil price shock and the reduction in oil production under the OPEC + agreement, have imposed heavy burdens on economic activity and financial balances in 2020.
In terms of economic performance for the year 2020, the mission estimated the real GDP of Kuwait to shrink by about 8% (and by about 6% for the non-oil sectors) in 2020, and the overall budget balance has significantly deteriorated compared to the previous year.
In the next stage, the mission expects a gradual recovery in 2021, supported by the revival of domestic and external demand with the continuation of vaccination operations, however, a great deal of uncertainty surrounds the expectations for reasons including the continuation of the pandemic and related global and local containment measures.
In conclusion, the mission emphasized the importance of continuing to give priority to combating the pandemic and mitigating its effects, especially on the most vulnerable groups, until the recovery is stabilized on a steady path, followed by the need to control public finances and implement strong structural reforms to maintain fiscal buffers and enhance growth. Economic.