Economy of Kuwait

Economy Of Kuwait

Kuwait is a small, relatively open economy with proven crude oil reserves of about 96 billion barrels (15.3 km3), i.e., about 9% of world reserves. Petroleum accounts for nearly half of GDP, 90% of export revenues, and 95% of government income. Kuwait lacks water and has practically no arable land, thus preventing development of agriculture. About 75% of potable water must be distilled or imported. Higher oil prices reduced the budget deficit from $5.5 billion to $3 billion in 1999, and prices are expected to remain relatively strong throughout 2000. The government is proceeding slowly with reforms. It inaugurated Kuwait's first free-trade zone in 1999 and will continue discussions with foreign oil companies to develop fields in the northern part of the country.