The Amiri Court

                Tel: 539 8888, Fax: 539 3069

                P.O. Box 799, Safat-13008

General Secretariat of the Council of Ministers

                Tel: 222 1333, Fax: 222 1797

                 - P.O. Box 1397, Safat-13014

Diwan of H.H. Crown Prince & Prime Minister

                Tel: 800 000

                P.O. Box 4, Safat-13001

Ministry of Awqaf & Islamic Affairs

                Tel: 246 6300 Fax: 200 9943

                P.O. Box 13 Safat-13001

Ministry of Commerce & Industry

                Tel: 248 0000, Fax: 246 5103

                P.O. Box 2944, Safat-13030

Ministry of Communications

                Tel: 481 9033, Fax: 484 7058

                 P.O. Box 318, Safat-13004

Ministry of Defence

                Tel: 484 8300, Fax: 483 6444

                P.O. Box 1170, Safat-13012

Ministry of Education

                Tel: 481 5001, Fax: 483 7829

                P.O. Box 7, Safat-13001

Ministry of Electricity & Water

                Tel: 537 1000, Fax: 537 1461

                P.O. Box 12, Safat-13001

Ministry of Finance

                Tel: 248 0000, Fax: 240 4025

                P.O. Box 9, Safat-13001

Ministry of Foreign Affairs

                Tel: 242 5141, Fax: 241 2169

                P.O. Box 3, Safat-13001                       

Ministry of Higher Education

                Tel: 240 1300, Fax: 245 6319

                 P.O. Box 27130, Safat-13132

Ministry of Housing

                Tel: 248 0000, Fax: 242 8942

                P.O.  Box 2935, Safat-13030

Ministry of Information

                Tel: 241 5301, Fax: 241 9642

                P.O.  Box 193, Safat-13002

Ministry of Interior

                Tel: 243 3840, Fax: 243 6570

                P.O.  Box 11, Safat-12500

Ministry of Justice, Legal & Admin Affairs

                Tel: 248 0000, Fax: 243 3750

                P.O. Box 6, Safat-13001

Ministry of Oil

                Tel: 240 6990, Fax: 242 1624

                P.O. Box 5077, Safat-13051

Ministry of Planning

                Tel: 242 8200, Fax: 240 7326

                P.O. Box 15, Safat-13001

Ministry of Public Health

                Tel: 487 8422, Fax: 486 5287

                PO Box 5, Safat-13001

Ministry of Public Works

                Tel: 539 5530, Fax: 539 5532

                P.O.  Box 8, Safat-13001

Ministry of Social Affairs & Labour

                Tel: 248 0000, Fax: 241 9877

                P.O. Box 563, Safat-13006

Ministry of State for Cabinet Affairs

                Tel: 240 0500, Fax: 240 0218

                P.O. Box 1397, Safat-13014

ECONOMIC PERFORMANCE

SOLID PERFORMANCE

Performance has been solid in recent years due to higher oil and non-oil activities. GDP growth was strong and inflation low. Kuwait recorded large fiscal and external accounts surpluses. The stock price index more than tripled since 2003. This economic success will be maintained in 2007 driven by sustained high oil prices, a slight up tick in oil export volume, and rising FDI associated with oil field expansion plans. The outlook is strong, even if reforms are slow, due to projected strong world oil prices and future plans for the hydrocarbon sector. Kuwait has a US$22bn plan to expand oil capacity to 3mn b/d by 2008 and double the production of petrochemical products. The new legislation passed in 2003 that allows 100% foreign ownership targets boost in FDI in the years ahead.

Economic Growth
Due to the buoyancy of world oil prices and strong non-oil activity, Kuwait’s economy strengthened further since 2004. GDP growth averaged 7.5% a year. GDP per capita jumped to US$ 30,188 in 2006. Current oil production is about 2.6mn b/d. Kuwait’s economy remains heavily dependant on its oil sector. Oil accounts for roughly 60% of GDP and 90-95% of government revenues. Current oil production capacity is estimated at 2.6-2.8mb/d, but plans are in the works to boost capacity to 3mn b/d in 2008

Fiscal policy
Kuwait has enjoyed sizeable budgetary surpluses dating back to 1999. The budgetary surplus jumped to 40% of GDP in 2005 and 43% in 2006. This is remarkable by international standards. This has been due to significantly higher oil prices combined with larger oil output (above quotas) resulting in much larger government revenues. Kuwait has the dilemma of how to “best manage” larger than expected oil windfalls. The surge in oil prices and in liquidity, which combined with speculation, has led to frenzy in the stock market. Profits in companies have been a reflection of capital gains on stock investments. Fortunately, the financial system (strong bank capitalization) is well equipped to withstand a reasonable correction.

The current account surplus will remain significant in 2006-07 along side a minimal external debt load. Kuwait also has fairly sizeable external financial assets estimated at US$100bn and providing also decent non-oil income stream. The external current account could move into deficit should oil prices drop below US$18-20/bbl. However, this is not anticipated in the foreseeable future. Medium- term growth prospects remain linked to international oil prices, which for the moment appear to favor Kuwait. It has managed to maintain price stability. However, buoyant economic conditions have led to higher inflation of 4% in 2005 and 2006 despite subsidies.

Investment Environment
Kuwait is increasingly adopting a more welcoming attitude towards increasing foreign direct investment. The implementing regulations of Kuwait’s March 2001 Foreign Direct Investment Law was approved by the Kuwaiti cabinet in 2003. The law provides for a range of investment incentives. The Kuwaiti cabinet is also currently discussing a draft law which cuts corporate tax rates from 55% to 15% for foreign entities operating in Kuwait. Given the ongoing struggle between the National Assembly and the government over a number of issues including economic reform, foreign investors should expect more delays in the passage of the longawaited multi-billion dollar Project Kuwait bill which promises to open up Kuwait’s upstream oil sector
to international oil firms.

Progress continues on the structural reform front, albeit at a slow pace. Private sector participation in the sectors previously dominated by the public sector has increased (particularly in telecommunications, airlines, and infrastructure development). However, several draft laws (including the privatization and competition laws) aimed at promoting a more market-friendly business environment are awaiting parliamentary approval.