JEDDAH: Kuwait’s economy expanded 1.7 percent in the second quarter of 2025 as it rebounded from contraction in the previous year and inflation continued to ease, according to the International Monetary Fund.
The institution’s latest Article IV consultation showed that real gross domestic product growth over the three-month period was led by a 3.1 percent increase in non-oil sectors.
Headline inflation fell to 2.4 percent in November, while fiscal and external positions remained strong, supported by large buffers and a stable financial system.
Despite these early gains, the IMF warned that sustaining non-oil growth will require a comprehensive package of fiscal and structural reforms, including extending the 15 percent corporate income tax to all domestic companies, reforming public sector wages, and increasing energy subsidies to Gulf Cooperation Council-average levels.
In October, Kristalina Georgieva, managing director of the IMF, said that the GCC is expected to remain a bright spot in the global economy despite rising uncertainty, with overall growth projected to approach about 4 percent in 2026 — supported by resilient non-hydrocarbon sectors, the unwinding of voluntary oil production cuts, and expansion of gas output.
