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General Economic Indicators

Indicators 2001 2002 2003
GDP (USD billion) 34.232 35.333 43.598
GDP per capita (USD) 14819.004 14600.338 17650.826
Real GDP growth (%) 0.6 % -0.4 9.9
Annual inflation rate (%) 1.7 1.4 1. 7
Annual u nemployment rate (%) 3.5 3.5 2.2
Foreign Direct Investments (F.D.I.) -147 7 67

Real economic growth in Kuwait during 2003 increased significantly. Crude oil output cuts seen in the previous three years were reversed, and output hit a new high not reported since the late 1970s. Activity outside the oil sector was robust, with the momentum seen last year continuing to build. Preliminary estimates are not expected till at least the second quarter, but a review of 2002 gross domestic product figures in constant prices (real GDP) should give a good indicator of major trends. In addition to accelerating growth lead by services and trade, these trends also reveal a steady decline in worker productivity outside the oil sector.

On a per capita basis, real output declined steadily by an annual average of 1.1% over the last eight years. Measured in constant 1995 prices, per capita real GDP reached KD 3.846 in 2002.

Despite a slight rise during 2003, consumer price inflation remained relatively low standing at 1.7% at the end of 2003. A weaker dollar has been partly responsible for the moderate increase in inflation during the year as the Kuwaiti dinar is linked to the dollar. As a result the dinar has depreciated against the euro, causing the unit cost of imports, overall to rise. This trend is partly mitigated by a shift towards imports from the US at the expense of European and Japanese products. The war in Iraq appears to have played a part in rising prices during the year. Inflation in producer prices, as measured by the wholesale price index (WPI), declined during 2003. In September the WPI had risen by 1.5% over twelve months, compared to a rise of 3.8% the previous year. Inflation in producer prices had risen to 4.5% per annum before cooling off in 2003. The WPI is largely a reflection of prices in the manufacturing sector, as this sector receives a 94% weighting in the index.

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