Kuwait’s current account records a surplus of KD 424m in Q3 2017

Central Bank of Kuwait’s data of key developments in Kuwait’s BoP for Q3 2017

KUWAIT: The Central Bank of Kuwait (CBK) published yesterday the preliminary data of the Balance of Payments (BoP) of the State of Kuwait for the third quarter of 2017 and the restated data of the second quarter of the mentioned year. Data shows that the Current Account (which sums up receipts and payments between domestic economy and other economies in terms of goods, services and income) recorded a surplus of KD 424 million during 2017 Q3 against a surplus of KD 261 million during the previous quarter, i.e. a rise of KD 162 million or 62.1 percent. The upturn in the current account surplus resulted from the increase in the surpluses of balance on goods, primary and secondary incomes on one hand, and the rise in the services account deficit on the other hand. The mentioned surplus in the current account mainly reflects an increase in the value of oil exports at a greater rate than the increase in the value of merchandise imports resulting in a rise in the surplus of the balance on goods (merchandise exports minus merchandise imports) to reach KD 1,920 million during 2017 Q3 compared to KD 1,789 million during the previous quarter.

On the other hand, deficit in the Services Account (net value of services transactions between residents and non-residents, the most important of which are transportation, travel, communications and construction) increased by KD 334 million or 19.7 percent to reach KD 2,029 million during 2017 Q3, compared to a deficit of KD 1,696 million during Q2.

In respect of the developments in the Financial Account (where the Financial Account records transactions involving transfers of financial assets and liabilities between residents and non-residents) of the State of Kuwait’s BOP during 2017 Q3, the net value of residents’ external assets included in the Financial Account further grew by KD 933 million during 2017 Q3 against a rise of KD 478 million during the previous quarter i.e. a growth of KD 455 million or 95.1 percent. As a result of the developments in the main BoP accounts, the overall position of Kuwait’s BoP recorded net capital outflows of KD 436 million during 2017 Q3 against a surplus of KD 7 million during Q2.

Given the overall position of the BoP of the State of Kuwait from a broader perspective taking into consideration the change in the net value of external assets of some institutions listed under the “General Government” item, the overall position of the Balance of Payments in a broad definition shows an estimated surplus of KD 1,767 million during 2017 Q3 against a surplus of KD 965 million during the previous quarter. Preliminary data on the Balance of Payments of the State of Kuwait during JanuarySeptember 2017 indicate that the current account recorded a surplus of KD 1,127 million against a deficit of KD 428 million during the corresponding period of 2016. Furthermore, the financial account recorded net capital outflows (growth in external foreign assets) of KD 3,795 million during January-September 2017 against net capital inflows (an increase in internal foreign liabilities) of KD 1,005 million during the corresponding period of 2016. As a result of the aforementioned developments in the main BOP accounts, the overall position of Kuwait’s BOP realized a limited surplus of KD 161 million during JanuarySeptember 2017 against a surplus of KD 186 million during the corresponding period of the previous year.

Given the overall position of the BOP of the State of Kuwait from a broader perspective taking into consideration the change in the net value of external assets of some institutions listed under the “General Government” item, the overall position of the Balance of Payments in a broad definition shows a surplus of KD 4,762 million during January-September 2017 compared with a deficit of KD 3,007 million during the corresponding period of the previous year.

KD 1,767 million BoP surplus for Q3 anticipated