Kuwait’s trade surplus slipped in 2014 for the first time in six years, falling by 18 percent to KS19.8 billion ($65.5 billion), mainly due to lower oil export receipts, a report said.
A decline in non-oil export earnings also dragged the surplus lower, added the latest Economic Update by the National Bank of Kuwait (NBK), TradeArabia reported.
With oil prices forecast to continue to fall or remain low in 2015, downward pressures on the surplus are expected to persist. Still, Kuwait continued to enjoy a relatively large surplus estimated at 41 percent of GDP in 2014, which was also its fourth highest on record.
Oil export earnings fell by 12 percent in 2014 to KD26.8 billion ($88.7 billion), its lowest in four years. Oil export earnings have been hampered by weaker oil prices. The Kuwait Export Crude (KEC) price was down 8.6 percent during the year, logging in an average of $95.6 per barrel in 2014.
Oil Exports to Fall Further
Oil export revenues are forecast to weaken further in the near- to medium-term, as oil prices continue to average lower. The KEC price averaged $48 per during the first quarter of 2015.
Non-oil exports declined by 6.3 percent in 2014 and stood at KD1.4 billion ($4.63 billion). Non-oil exports were mainly driven lower by a decline in ethylene prices. The stronger dinar against major currencies, with the exception of the dollar, might also be hindering non-oil export growth.
“We may see a slight pick-up in non-oil exports in the first quarter of this year, following a slight rebound in ethylene prices,” NBK said in the report.
Import growth softened further in 2014 but still churned out another record high of KD9 billion ($29.7 billion). Import growth continued to gradually weaken in 2014, possibly due to the stronger Kuwaiti dinar, which would reduce the cost of imports on average.
Import growth is forecast to continue to gradually soften in the near-to-medium term, before picking up slightly on the back of greater economic activity and investment spending, the report said.
