High oil prices continue to support the build up of large fiscal and current account surpluses while
the inflation rate is on the rise. However, geopolitical tensions in the region pose a threat to stability.
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2002 2003 2004 2005 2006
~ÅÅçêÇáåÖ=íç=íÜÉ=fjcK=qÜÉ=ÅìêêÉåÅó=
Budget balance Current account
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S=B=~Ö~áåëí=íÜÉ=rp=Ççää~êK=qÜÉ=ÉñÅÜ~åÖÉ=ê~íÉ=éçäáÅó=ÅÜ~åÖÉ=áå=ÅçãÄáå~íáçå=ïáíÜ=
êáëáåÖ=áåÑä~íáçå~êó=éêÉëëìêÉ=áå=çíÜÉê=d``=ÅçìåíêáÉë=Ü~ë=ê~áëÉÇ=ÇçìÄíë=çîÉê=íÜÉ=
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important your attention is drawn to the statement on the back cover of this report which affects your rights.
SEB Merchant Banking Country Risk Analysis January, 2008
päçï=ÉÅçåçãáÅ=êÉÑçêãëK=eáÖÜ=çáä=éêáÅÉë=~ë=ïÉää=~ë=ÇáÑÑÉêÉåÅÉë=ÄÉíïÉÉå=íÜÉ=Å~ÄáåÉí=
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How to read the chart?
Key ratios 2007 Moving out from center Resilience
16
reduces the risk. 14
External Ratings Peers Graph: Kuwait scores very high on macrobalance and
Moody's: Aa2, stable Saudi Arabia liquidity in line with other oil rich countries. High income per
S&P: AA-, stable UAE capita gives a higher score than average for resilience.
Fitch: AA-, stable Qatar However, event risk related to geopolitical tensions in the
region pose a threat to stability.
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=
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2
SEB Merchant Banking Country Risk Analysis January, 2008
Key data: 2002 2003 2004 2005 2006 2007 2008 2009
GDP/capita (US$) 18898 22713 31050 36737 40561 44785 44897 45123
GDP (change) 3.1% 16.5% 10.5% 9.9% 5.2% 2.8% 4.9% 4.3%
Investments/GDP 17% 21% 29% 31% 41% 48% 54% 56%
Budget balance/GDP 13% 18% 20% 29% 30% 28% 28% 24%
Govt debt/GDP 32% 25% 19% 14% 12% 10% 9% 9%
CPI inflation (%) 0.9% 1.0% 1.3% 4.1% 3.0% 5.4% 3.2% 0.2%
Money demand (%) 4.5% 6.2% 11.2% 7.9% 18.3% 16.0% 18.2% 21.2%
Stock prices (%change) 39% 102% 34% 79% -7% 18%
Interest rates 2.5% 2.1% 2.8% 5.6% 5.8% 6.1% 6.3% 6.3%
Exch. Rate ($) 0.30 0.29 0.29 0.29 0.29 0.28 0.28 0.28
Trade/GDP (%) 109% 111% 125% 108% 98% 100% 89% 88%
Oil price (Brent) $25 $29 $38 $54 $65 $73 $87 $77
Billions US $
Export of goods 24.9 33.8 51.7 65.6 70.3 79.3 76.4 75.0
Imports of goods 16.5 19.3 22.8 24.6 29.6 35.7 39.7 42.9
Other: 1.1 1.2 1.2 1.2 1.2 1.2 1.2 1.2
Current account 9.4 18.2 34.3 51.0 50.2 51.6 42.2 37.0
(% of GDP) 11.2% 19.7% 30.6% 40.9% 50.0% 43.4% 39.5% 31.5%
Net FDI 4.9 -2.5 -4.9 -7.8 -8.8 -8.5 -7.2 -6.9
Loan repayments 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net other capital flows -16.0 -15.0 -28.4 -39.4 -31.8 -42.2 -33.9 -28.9
Balance of payments -1.7 0.7 1.0 3.8 9.5 0.9 1.1 1.2
Total debt 13.2 13.2 13.0 13.0 13.0 13.0 13.0 13.0
o/w short term debt 4.1 4.8 5.7 6.1 7.4 8.9 9.9 10.7
Source: OEF (Oxford Economic Forecasting) and SEB estimates
Rating history
Fitch (eoy) AA- AA- AA- AA- AA- AA-
Moody's (eoy) A2 A2 A2 A2 Aa3 Aa2
S&P (eoy) A+ A+ A+ A+ A+ AA-
Type of government: Autocratic monarchy with active Parliament
Next elections 2010
Other:
Latest PC deal None
Recent IMF programs None
M o n e y s u p p ly M 2
In f la t io n
2 5 .0
7
2 2 .5
6
2 0 .0
5 1 7 .5
1 5 .0
Percent
Percent
4
1 2 .5
3 1 0 .0
2 7 .5
5 .0
1
2 .5
0 0 .0
01 02 03 04 05 06 07 02 03 04 05 06 07
c .o .p 1 2 m o n t h s
S o u rc e : R e u te r s E c o W i n c .o .p 1 2 m o n th s
S o u r c e : R e u te r s E c o W i n
S to c k m a rk e t E x c h a n g e ra te
0 .3 1 0
13000
0 .3 0 5
11000 0 .3 0 0
0 .2 9 5
USD/KWD
9000
Index
0 .2 9 0
7000
0 .2 8 5
5000
0 .2 8 0
3000 0 .2 7 5
0 .2 7 0
1000 02 03 04 05 06 07
02 03 04 05 06 07
S o u rc e : R e u te r s E c o W i n
S o u rc e : R e u te rs E c o W i n
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3
SEB Merchant Banking Country Risk Analysis January, 2008
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