Abstract
Kuwait’s infrastructure sector has been hit by a combination of factors
in the last quarter resulting in a
decrease in forecasted growth. Falling
oil prices and new OPEC quotas are set to reduce petroleum
production
which accounts for 80% of government revenues. Meanwhile the global credit
crisis, along
with local political uncertainty, is greatly impacting
investor confidence in Kuwait. These factors have
lead to an exodus of
ex-pat workers and mean some infrastructure projects may be cancelled or
postponed
until confidence returns.
BMI has revised its 2009 forecast
for Kuwait’s construction industry down since Q109 to KWD 0.65bn,
By
2013 the construction industry’s value is set to reach KWD 0.78bn. The
country’s construction
industry value growth has slipped down
marginally from 2.67% growth in 2008 to 2.28% in 2009 and is
expected to
fall further to 1.03% in 2010. Kuwait’s construction industry growth
will recover slightly by
2013 with growth of 1.60% expected by then.
There are already signs of delays in several large infrastructure projects,
notably the $7bn metro system
for Kuwait City which is expected to be
delayed by 18 months and the extensive Al-Zour refinery which
may be
revised. However, there is news that the Kuwaiti government is investigating
diversification in
energy production with analysis of nuclear generation
potential.
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