"Al-Shal": Kuwait's Public Debt Reaches 8.6 Billion Dinars

A weekly report by Al-Shal Economic Consulting warned of the repercussions of the absence of developmental and reform priorities in the country, emphasizing that the issuance of the “Combating Commercial Concealment Law” comes at an inappropriate time and fails to reflect the reality of a business environment that repels investment.

In a related context, the report reviewed financial and monetary developments based on the latest data from the Central Bank of Kuwait for June 2026, which showed that Kuwait’s total domestic and external public debt rose to approximately 8.6 billion Kuwaiti dinars, equivalent to 17.2% of the estimated gross domestic product (GDP) for the current year.

Regarding the first axis, Al-Shal considered that delving into the commercial concealment law without addressing major priorities first would only yield reverse results. It pointed out that the local business environment is suffering from significant capital flight; figures from the United Nations Conference on Trade and Development (UNCTAD) revealed that foreign inflows into Kuwait over the past five years did not exceed $4.5 billion, compared to $86.7 billion in local capital exiting for direct investment abroad, resulting in a massive net deficit of $82.2 billion.

The report clarified that enacting the law amid this capital flight, coupled with ongoing geopolitical tensions and ambiguity regarding state assets, would further drive away local investments and exacerbate banking and judicial pressures and concerns.

The report argued that administrative and economic priorities must focus on addressing three structural gaps: the primitiveness of economic engines and their near-total reliance on oil; the imbalance of the general budget, with 90% of current expenditure directed from oil revenues; and the distortion of the national labor balance, with the public sector absorbing more than 80% of citizens into unsustainable jobs.

The report highlighted the high cost of delaying structural reform; the average growth rate of the Kuwaiti economy was 1.5% for the period from 2010 to 2025, compared to a 3.7% average for Gulf Cooperation Council (GCC) countries. This resulted in Kuwait’s share of the total GCC economy shrinking from 9.9% in 2010 to 6.6% in 2025.

In its second axis, the report addressed the statistical monetary bulletin of the Central Bank of Kuwait for June 2026, revealing that the balance of total domestic public debt instruments (including bonds and swap operations) increased by 2.75 billion dinars to reach 3.3 billion dinars (representing 6.6% of the estimated GDP of 50.1 billion dinars, according to Economist Intelligence Unit (EIU) estimates).

Meanwhile, external public debt data stood at approximately $17.25 billion (equivalent to 5.3 billion Kuwaiti dinars) as of July 23, 2026, bringing the total domestic and external public debt to 8.6 billion Kuwaiti dinars.

The report noted that total credit facilities for residents provided by local banks rose by 5.9% year-on-year to reach 54.752 billion dinars (representing 52.5% of total bank assets). Personal facilities accounted for 20.347 billion dinars (37.2% of total credit), with a growth of 3.9%, of which installment loans amounted to 17.688 billion dinars (86.9% of personal facilities), while consumer loans recorded 2.041 billion dinars.