KIC: 1.8% Growth in Kuwait's Consumer Goods Sector

The Kuwait Finance House (KFH), referred to as “the Center” in its monthly report on market performance for October 2026, stated that the Kuwait Stock Exchange declined during the month, mirroring trends in other regional markets. Investor sentiment was affected by escalating security risks in the region, disruptions to maritime shipping around the Strait of Hormuz, and the International Monetary Fund’s sharp downward revision of growth forecasts for Gulf Cooperation Council (GCC) countries. The general market index fell by 3.7% in October, while the main market index dropped by 7% and the first market index declined by 3%. By sector, positive performance was limited to the basic consumer goods sector, which gained 1.8%. Bank stocks fell by 2.6% in October, with shares of National Bank of Kuwait and Kuwait Finance House declining by 0.9% and 3.1%, respectively.

Kuwait’s non-oil private sector continued its growth for the third consecutive month in September, as the Purchasing Managers’ Index (PMI) released by S&P Global reached 52.4 points, down from 53.6 points in August, when it hit a six-month high. The local credit market rose by 6.3% year-on-year in September, supported by broad-based lending growth, including a 5.1% annual increase in household credit and a 6.7% annual rise in corporate credit. Deposits by expatriates also grew by 10.8% annually, while inflation remained subdued at 2.2% year-on-year in July.

Gulf stock markets declined in October, with the S&P Composite Gulf Markets Index falling by 4.8%. Investor sentiment was impacted by attacks on commercial ships in the Strait of Hormuz area, with October marking the worst month for such incidents since tracking began in 2017. Additionally, waves of attacks on energy infrastructure and airports in Saudi Arabia raised concerns.

The Center noted that the non-oil sector in GCC countries continued to improve in September, despite the ongoing impact of geopolitical tensions on economic data. In Saudi Arabia, the non-oil PMI rose to 55.3 points from 53.8 points, recording its strongest reading since February, driven by a sharp increase in new orders, despite a seventh consecutive monthly decline in foreign orders. The UAE PMI remained steady at 55.3 points, a 20-month high, while the Dubai PMI rose to 54.5 points. In Qatar, the index fell to 47.3 points, with activity contracting for the eighth consecutive month.

The UAE’s real GDP contracted by 2.1% year-on-year in the second quarter of 2026, marking the first decline in over five years, with non-oil GDP falling by 1.1% annually. Saudi Arabia announced its 2027 general budget with expenditures of approximately SAR 1.4 trillion, reducing the deficit to 3.6% of GDP, down from 4.9% in 2026.

The report also indicated that global and US stock markets declined in October, with the S&P 500 Index falling by 0.9% and the Morgan Stanley Global Index dropping by 0.8%. Investor sentiment weakened after September inflation reached 3.7% year-on-year, exceeding expectations, which led to a 1.1% single-day drop in the S&P 500.

The Center’s report highlighted that Brent crude oil prices rose by 13.6% in October to $117.64 per barrel, with crude trading above $110 per barrel in the second half of the month, near its six-month high.