The Impact of COVID-19 Pandemic on Kuwait and its GDP
Like any other country in the Gulf and beyond, Kuwait and its economy have taken a near-term hit an unprecedented backlash owing the eruption and disastrous spread of the COVID-19 pandemic. With domestic economic activities and the international trade grounded to alt in the better part of the first and second quarters of 2020, Kuwait was in for a tough time and awful depression of the national GDP. Kuwait is colossal producer and exporter of oil and other petroleum products. Hence, the country’s GDP equation and analysis would be incomplete without the subset of exports and imports. In this discussion, the entire focus is on the impact of the pandemic on the Export/Imports subset of the Gross Domestic Product.
On top of the economic meltdown and GDP collapse was the adverse depression of global oil prices. The country’s export performance was negatively triggered and hammered by the responsive OPEC supply deals and the shattering global oil market and demand. The oil prices were reported to fall sharply below zero in the biggest oil markets hence plunging Kuwait in a state of near-zero oil exports. According to the National Bank of Kuwait, OPEC-projected cuts have seen the country’s oil production drop by 8% in 2020 (National Bank of Kuwait, 2020). The diminishing oil exports exposed the country to dangerous drop-offs in international trade, and capital flows hence affecting the export performance index. The general investor sediment has remained subdued, and the government recovery interventions seem to offer an insignificant impact on the oil trade dominated economy of Kuwait.
In conclusion, Kuwait has been hard hit by the global pandemic that has nearly-collapsed the country’s economy. Oil prices and demand have seen unprecedented adjustments forcing the government to almost bring the export and import trade routes to an utter stop. The future looked uncertain, but with the slow resumption of various economies around the globe, there is a glimpse of home for the country’s collapsed economy.
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