Kuwait’s trade surplus edged down to KD24.3 billion ($86 billion) in 2013 from a record KD25.7 billion the year before due to lower oil export receipts during the year, said a report.

Nevertheless, the surplus – estimated at around 48 per cent of 2013 GDP – is still the second-highest on record, and extremely large by international standards, stated the national Bank of Kuwait (NBK) in its report.

"Though figures for the current account position have not yet been released, we expect it to have recorded another stellar year on the back of strong trade data. A current account surplus of up to 40 per cent of GDP for 2013 seems likely," it added.

According to NBK, the oil exports edged down to KD30.8 billion in 2013, some three per cent lower than a year earlier. This was due to lower oil prices, as oil markets eased in 2013 on the back of surging non-Opec supplies and modest growth in global demand.

Kuwait export crude prices averaged $105 per barrel during the year, some $4 (4 per cent) lower than in 2012.

Meanwhile, the non-oil exports climbed to a record KD1.9 billion – though it still accounts for only six per cent of total exports.

These were mainly driven by higher exports of ethylene products, which were up by a large 16 per cent y/y.

Ethylene products’ contribution to non-oil exports has risen significantly over the past few years, from 12 per cent in 2008 to some 40 per cent by 2013 – partly related to capacity expansion in Kuwait’s petrochemical sector.

The NBK pointed out that its imports saw steady growth of around nine per cent in 2013, and reached an all-time high of KD8.3 billion.

The imports provide an important indicator of domestic economic activity. On one crude measure, the latest import figures could indicate stable growth in non-oil GDP in 2013 – for which data is not yet available.

Within the non-oil economy, Kuwait’s consumer sector has been an important growth driver; imports of consumer goods have grown at a faster rate than other types of imports in recent years, said the country's top bank.

"This year, we expect the trade balance to shrink further, though remain very large. Oil markets are expected to loosen in 2014, putting downward pressure on prices and reducing oil export receipts," it stated.

NBK pointed out that the outlook for imports was mixed. "A faster pace of execution of stalled government projects would provide a much-needed boost to the economy, while recent signs point to a slight softening in the consumer sector," the lender said in its report.

"Despite the latter, consumer spending should remain relatively strong, supporting growth in imports," it added.-TradeArabia News Service