- Kuwaiti spending on travel decreases by more than 57.5% in 2020 to only two billion dinars!
- Kuwait sold 11 billion dinars of oil last year after the significant improvement in crude prices
- Importing goods and imports worth 7.5 billion dinars..an average of two billion dinars every 3 months
Kuwaitis’ spending on travel witnessed a sharp drop of 57.5% during 2020, in conjunction with the complete closures that many countries of the world took to prevent the outbreak of the Corona pandemic, as their spending, according to the preliminary data of the balance of payments, issued by the Central Bank of Kuwait yesterday, amounted to about 2.04 billion dinars, compared to spending of 4.8 billion dinars in 2019, according to the revised data for the travel item.
Note that the spending of Kuwaitis on travel witnessed a significant improvement during the third and fourth quarters of last year compared to the second quarter, which witnessed a sharp decline in conjunction with the start of the pandemic and the closure of Kuwait International Airport and the entry of many tourist countries in the region and the world into complete closure, and based on the modified data for spending Travel, it amounted to about 1.19 billion dinars in the first quarter, to witness a decrease to 81.2 million dinars in the second quarter, then it reached 458.8 million dinars in the third quarter, then 314.6 million dinars in the fourth quarter of last year, with the start of easing travel restrictions.
It is noteworthy that spending on travel, according to the “central” statistic, is not limited to tourism and work trips for citizens and others, but rather includes treatment abroad, study missions, official mission trips, and others.
With regard to remittances of expatriates in Kuwait, the Central Bank of Kuwait data showed that workers’ remittances during 2020 witnessed a jump and a steady growth of about 14.5% to reach 5.3 billion dinars, compared to transfers of 4.62 billion dinars, and it appears that workers’ remittances witnessed a significant improvement in the third and fourth quarters of last year, Transfers amounted to 1.47 billion dinars in the fourth quarter, 1.4 billion dinars in the third quarter, 1.05 billion dinars in the second quarter, and 1.35 billion dinars in the first quarter.
The increase in the value of the money transferred by the expatriates to their countries comes despite the repercussions of the Corona pandemic, which resulted in the dismissal of thousands of expatriates from their jobs, in addition to tens of thousands whose salaries were reduced at different rates, which contributed to the reduction of transfers, especially in the first and second quarters of last year, to witness a significant increase after that. At the end of last year, in addition to the fact that many expatriates sent their families to their country, thus not having to spend a lot of money in Kuwait and transfer the bulk of it to their families, not to mention that the expatriates did not have any means to benefit from their savings in Kuwait, such as direct investment or buying real estate or others. .
The state of partial and comprehensive closure implemented by the country and the closure of restaurants and cafes may be one of the reasons that prevented the increase in expatriate spending in the country and their resort to increasing their remittances to their countries of origin, not to mention the instability experienced by some as a result of the current conditions resulting from the increase in Corona cases, in addition The expatriates did not travel during summer and holidays to their countries, as the item of travel tickets and gifts was one of the costly items for arrivals.
According to the country’s population statistics, according to the Public Authority for Civil Information, the number of arrivals reached 3.2 million, compared to 1.45 million Kuwaitis, with a total population of 4.6 million. Asian countries top the list of remittances such as India, Bangladesh and the Philippines, while Arab countries come after them, led by Egypt, Lebanon and Syria and Jordan.
The importance of balance of payments
The balance of payments is a reflection of the performance of the Kuwaiti economy during the financial period, in terms of the overlap of the local economy with the global economy, and the balance of payments is an important tool that allows decision makers to determine the competitiveness of their countries’ economies, which helps them in planning, drawing up and evaluating macroeconomic policies in general and economic relations Foreign affairs, especially in light of its production structure, the strength of its national economy, and its competitiveness.
In addition, the data revealed that Kuwait sold oil worth 10.9 billion dinars during 2020, and this significant improvement in the value of oil exports comes after the gradual rise in Kuwaiti crude oil prices after their sharp collapse in the second quarter of last year, following the outbreak of the Corona pandemic and the asylum of many countries the world to complete closure and stop travel and air traffic.
During the fourth quarter of last year, oil exports amounted to 2.79 billion dinars, and in the third quarter of the year were 2.78 billion dinars, and in the second quarter they witnessed the largest decline to reach 1.7 billion dinars, compared to the highest level recorded during the year when it reached 3.6 billion dinars in the first quarter of last year.
In contrast to exports, Kuwait’s imports of goods amounted to 7.5 billion dinars for the whole of 2020, and it is remarkable that commodity imports witnessed a significant increase during the fourth quarter of last year, reaching more than two billion dinars, compared to 1.8 billion dinars in the third quarter and about 1.6 billion dinars in the quarter. The second was about two billion dinars in the first quarter. In total, the average Kuwaiti imports of goods amounted to about two billion dinars.
Central Bank of Kuwait data show that the current account (which shows the summary of receipts and payments between the local economy and other economies with regard to transactions of goods, services and income) recorded a surplus during the fourth quarter of 2020 amounting to about 3.5 billion dinars, compared to a surplus of about 2.3 billion dinars during the quarter. Previously, an increase of 1.1 billion dinars, or 50.6%.
The increase in the current account surplus is mainly due to the increase in the value of the total receipts included in the credit side of the current account by about 1.2 billion dinars, or 16.7%, compared to the previous quarter, on the one hand, and the increase in the value of the total payments included in the debit side of the current account by about KD 59.5 million, or by 1.2% compared to the previous quarter, on the other hand.
Preliminary data also show a decrease in the value of the commodity balance surplus during the fourth quarter of 2020 by about 143.7 million dinars, or 11.4%, compared to the previous quarter, bringing the value of this surplus to about 1113.4 million dinars, compared to about 1257.1 million dinars during the previous quarter.
And the services account (the net value of transactions related to services between residents and non-residents, including transportation services, travel, communications, construction, and other services, in addition to government services and goods) recorded an increase in the value of the deficit during the fourth quarter of 2020 by an amount of 37.7 million dinars, at a rate of 4.5% to about 878.9 million dinars, compared to a deficit of about 841.1 million dinars during the previous quarter.
With regard to the developments of the financial account (which records transactions of exchange of financial assets and liabilities between residents and non-residents in the local economy) of Kuwait’s balance of payments, preliminary statistics indicate that there is a net financial outflow (increase in the net value of investments abroad by residents in the local economy). ) amounted to about 2.8 billion dinars during the fourth quarter of 2020, compared to a net financial flow abroad that amounted to about 3 billion dinars during the previous quarter.
As a result of developments in the main accounts of the balance, the overall position of Kuwait’s balance of payments during the fourth quarter of 2020 recorded a deficit of about 900 thousand dinars, compared to a surplus of about 680.2 million dinars during the previous quarter.
With a more comprehensive look at the status of Kuwait’s balance of payments that takes into account the change in the net foreign assets value of some of the entities registered under the “general government” item, in addition to the value of the total reserve assets of the Central Bank of Kuwait (change), the overall position of the balance of payments in the broad sense shows a surplus during the quarter The fourth quarter of 2020 amounted to about 993.5 million dinars, compared to a surplus of about 2.5 billion dinars during the previous quarter.
121.5 million dinars spending by tourists in Kuwait
The spending of foreign tourists in Kuwait visiting non-residents in the country during the past year amounted to 121.5 million dinars, and the spending of tourists in the country during the first quarter of last year reached the largest quarterly value when it reached 54.2 million dinars, to witness a decrease in the second quarter with the closure of borders and airports in Kuwait , to witness a limited recovery during the third quarter, bringing spending to 27 million dinars, then 28 million dinars in the fourth quarter of last year, knowing that these amounts are recorded on the receipts side (the credit side).