World Bank expects Kuwait's economy to grow by 22% in 2027

The World Bank has raised its growth forecasts for Gulf economies in 2027 compared to its estimates released last April, anticipating accelerated growth in Kuwait and Qatar after they were more heavily impacted by the war’s fallout in 2026. According to the estimates, the Qatari economy is expected to grow by 26.7%, followed by the Kuwaiti economy at 22%, while the UAE economy is projected to grow by 9.5%, Saudi Arabia by 7.9%, Bahrain by 4.2%, and Oman by 3.4%. Qatar recorded the largest upward revision among Gulf countries, with an increase of 21 percentage points compared to previous forecasts, signaling an improvement in the Bank’s assessment of its economic growth trajectory for the coming year.

Meanwhile, the International Monetary Fund (IMF) warned on Tuesday of three main risks threatening global financial stability, emphasizing that the simultaneous occurrence of these risks could lead to widespread financial disruptions despite the continued resilience of global markets. This was stated in the IMF’s Global Financial Stability Report, titled “Resilience, Risks, and Reshaping,” which was presented at a press conference held in Bangkok, Thailand, on the sidelines of the IMF and World Bank Annual Meetings.

The report clarified that these risks include the possibility of a downturn in artificial intelligence (AI) investments, a sharp rise in government bond yields, and major cyberattacks. It added that financial risks remain elevated due to increasing reliance on borrowing, rising government debt, and interconnectedness among financial institutions and investors. The report warned that a slowdown in AI investments or failure to realize expected profits could lead to a sharp decline in technology company stocks and the spillover of losses into bond markets and financial institutions, given the growing dependence on borrowed funding.

It revealed that large technology companies developing AI infrastructure now account for nearly 10% of global investment-grade corporate bond issuances, compared to less than 1% in 2024, reflecting the sector’s increasing reliance on debt markets.

For his part, Athanasios Vamvakidis, Deputy Director of the IMF’s Monetary and Capital Markets Department, said at the conference that the rest of the world’s exposure to U.S. assets, particularly those linked to AI, has reached unprecedented levels, warning that any significant drop in their value could have wide-ranging repercussions on global markets.

Regarding the second source of risk, the IMF warned that rising energy prices, inflationary pressures, and increasing public debt could lead to sudden spikes in government bond yields, thereby raising borrowing and refinancing costs and putting pressure on governments and financial institutions. He noted that bond markets have so far absorbed these pressures without widespread disruptions, but cautioned that underlying vulnerabilities could worsen in the event of new shocks.

On the third source of risk, the report revealed that software developers have not had sufficient time to address security vulnerabilities before they were exploited in more than 70% of observed cases in 2026, an increase of 20 percentage points from the previous year. It explained that targeting a major financial institution or a critical technology service provider could disrupt financial transactions and rapidly spread disturbances to other institutions and markets, with the complexity of attacks increasing due to advances in AI technologies.

In its assessment of the banking sector, the IMF confirmed that global banks generally still maintain strong capital levels, but it clarified that stress tests indicated that banks representing 22

Only 100 percent of global banking assets’ capital levels would fall short in a severely adverse economic scenario, compared to 18 percent in the 2025 stress tests. Chapter Two of the report addressed risks associated with the expansion of hedge fund activities, whose total assets reached approximately $13 trillion, while their aggregate notional exposures approached $40 trillion, warning that their reliance on borrowing and simultaneous sales could exacerbate market disruptions. Chapter Three covered financial asset tokenization, which involves representing assets digitally to facilitate trading and settlement, noting that while this technology could reduce costs and speed up transactions, it creates new risks related to liquidity and the transmission of shocks among financial institutions. The Fund called on governments and regulators to strengthen oversight of non-bank financial institutions, borrowing risks, and bond markets, and to develop protections for financial systems against cyberattacks, while taking measures to bring public debt back to sustainable levels. Bangkok is hosting the annual meetings of the International Monetary Fund and the World Bank from October 12 to 18, with a broad Kuwaiti and international participation comprising thousands of financial officials and economists to discuss global economic and financial challenges and ways to enhance monetary and investment cooperation.