Data from the Central Bank of Kuwait revealed that foreign direct investment (FDI) in the country witnessed a cumulative rise by the end of H1 2023. For the first time, it reached 5 billion dinars (about $16.16 billion), marking a 4.1% increase from the end of Q1 2023. This amount was 4.8 billion dinars, reflecting an 8.7% jump from the end of 2022, which was 4.6 billion dinars.
Additionally, Kuwait’s direct investments abroad stood at 14.69 billion dinars by the end of H1 2023, a 1.6% decrease from 14.95 billion dinars at the end of Q1, according to the Kuwaiti “Al-Anbaa” newspaper.
The data showed Kuwait’s international investment position, which is the total assets minus total liabilities, reached 33.2 billion dinars by H1 2023’s end. This is a 1.4% increase from 32.77 billion dinars at the end of Q1 and a 3.2% rise from 32.2 billion dinars last year.
Kuwait, a country located in the Middle East and a member of the Gulf Cooperation Council (GCC), boasts significant oil reserves. As the world’s eleventh-largest oil producer, its economy has traditionally been heavily reliant on oil revenues. However, in recent years, there has been a concentrated push from the government to diversify the economy and reduce its dependency on oil. This initiative, known as “New Kuwait 2035,” outlines a comprehensive roadmap to transform the nation into a financial and trade hub.
Foreign direct investment (FDI) is a crucial part of this diversification effort. The government has implemented several policies and incentives to attract foreign investors to sectors other than oil, such as information technology, renewable energy, and finance. These reforms have included easing restrictions on foreign ownership, tax incentives, and improved regulatory frameworks.
Kuwait’s strategic location between major markets in Asia and Europe, coupled with its membership in various trade blocs and its relatively stable political environment, makes it an attractive destination for investors.
However, while FDI plays a crucial role in Kuwait’s diversification plans, the country also actively invests abroad. The Kuwait Investment Authority (KIA), one of the world’s oldest sovereign wealth funds, manages the nation’s vast reserves, investing in a range of assets globally, from real estate to equities.
This recent rise in FDI is seen as a positive indicator of the success of Kuwait’s diversification efforts and its growing attractiveness as an investment destination.
