NBK Reinforces Commitment to Environmental Sustainability by Sponsoring KDT | Kanebridge News
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NBK Reinforces Commitment to Environmental Sustainability by Sponsoring KDT

National Bank of Kuwait (NBK) reinforcing its leading role in addressing environmental issues

Thu, Jun 20, 2024 2:42pmGrey Clock 2 min

Demonstrating its unwavering dedication to supporting sustainability and environmental conservation initiatives, NBK continues to back Kuwait Dive Team’s efforts to protect and rehabilitate the marine environment, including islands and coral reefs, and to remove harmful waste to preserve marine biodiversity.

As part of these ongoing efforts, KDT recently lifted a sunken boat from the waters of Fahaheel. Such boats pose a threat to the marine ecosystem and organisms due to their fuel and oil content, in addition to obstructing maritime navigation.

On this occasion, Talal Al-Turki, Executive Manager, head of Public Relations & Event Management at National Bank of Kuwait said, “We, at NBK, always seek to leverage our role as one of the leading corporations in social responsibility by introducing a variety of initiatives and programs across different fields, especially the environment.”

“All awareness campaigns promoted on the social media pages of the bank and KDT aim to increase awareness of the importance of the environment and environmental preservation. Additionally, these campaigns highlight KDT’s valuable contributions in the protection and restoration of the marine ecosystem, as well as encourage volunteering in serving the marine environment by preparing national cadres specialized in marine operations and maintenance of mooring buoys around coral reefs,” he mentioned.

“Our partnership with KDT aligns with our strategy to adopt environmental governance best practices, through a set of initiatives launched by the bank to promote sustainability, deepen environmental culture, and create awareness and interest in maintaining a clean, pollution-free environment,” he emphasized.

Talal Al-Turki, Executive Manager, head of Public Relations & Event Management at National Bank of Kuwait

Since the beginning of this year, Kuwait Dive Team lifted 56 tons of marine debris in 33 operations, with the participation of 800 volunteers. They also removed 28 tons of harmful waste in 18 operations on the coasts, ports and islands, in cooperation with government agencies, 7 tons of abandoned fishing gear, and recovered 3 boats and a marine vessel of 21 tons. On the other hand, the team organized many awareness sessions and workshops with 300 participants to raise awareness on the importance of marine ecosystems and how to protect them.

It is worth mentioning that NBK regards environmental and climate issues as key priorities and therefore organizes awareness campaigns on its social media platforms to increase awareness on the importance of the environment and environmental conservation. Furthermore, the bank’s sponsorship of Kuwait Dive Team has significantly contributed to protecting and restoring the marine ecosystem in Kuwait through many activities, including protecting coral reefs, cleaning beaches, establishing fish colonies, and lifting sunken ships and boats.

 



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Kuwait’s Economy Faces Continued Challenges Amid Oil Production Cuts and Non-Oil Sector Decline

The oil sector remained constrained by Opec-mandated crude oil production cuts, while the non-oil sector recorded a steeper decline than in the previous quarter

Fri, Jul 12, 2024 4 min

The Preliminary estimates from National Bank of Kuwait (NBK) Economic Research reveal a 4.4% year-on-year decline in Kuwait’s GDP for Q4 2023, slightly improving from Q3’s -5.8% outcome.

The oil sector remained constrained by OPEC-mandated crude oil production cuts, while the non-oil sector recorded a steeper decline than in the previous quarter.

For 2023 as a whole, the non-oil economy contracted for the second consecutive year. Parallel data on the expenditure side of the national accounts showed that investment’s share of GDP stood at a modest 17% of GDP in 2022 (the latest year available). This figure could rise significantly as the new government pursues its diversification and development goals.

Oil GDP Contraction

The figures indicated a 6.4% year-on-year decline in oil GDP in Q4, a slight improvement over Q3. Kuwait maintained crude oil production at 2.55 mbpd, in line with its OPEC+ production cut obligations. For the full year, oil GDP contracted by 4.3%, a marked turnaround from the robust expansion witnessed in 2022, when a tighter oil market prompted Kuwait and its OPEC counterparts to raise production.

However, oil’s positive performance in 2022 largely defied the trend, as oil GDP growth has been negative in seven of the last ten years, fluctuating with OPEC supply policy adjustments in response to the post-US shale landscape of ample supply and downward oil price pressures. Kuwait’s crude oil production in 2023 (2.59 mbpd) is about 10% lower than in 2014 (2.87 mbpd).

Looking ahead, oil GDP growth is expected to rise from Q4 2024 after OPEC+ announced in June that members’ 2024 voluntary production cuts, including Kuwait’s 135 kbpd, will be gradually unwound over the course of a year starting in October. “We estimate Kuwait’s oil GDP will rise by 0.9% q/q in Q4 and by 4.0% y/y in 2025 if this production is restored fully as planned, though Opec has left open the possibility that it could pause and even reverse these supply gains if market conditions dictate,” NBK said.

Non-Oil Sector

Meanwhile, GDP in the non-oil sector remained in contraction territory at -2.3% year-on-year in Q4 2023, extending a sequence that has lasted for five consecutive quarters. For 2023 as a whole, non-oil activity fell by 2.9%, marking a second consecutive annual decline following 2022’s fall of 0.1% (downwardly revised from +0.3%). This is the weakest reading in the available series and well below the 2011-2019 average of +3.3% per year.

Performance at the sectoral level in 2023 was led by transportation & storage (+20%), hotels & restaurants (+17.4%), and household employment (+13.1%). The latter pointed to burgeoning demand for domestic labor, while the increase in hospitality sector output, for the second consecutive year, signifies strong consumption and efforts to develop and expand local dining and tourism capacity.

However, larger sectors such as manufacturing (-17% year-on-year), trade (-2.8%), and other services & real estate (-2%) performed markedly worse in 2023 compared to 2022.

The Central Statistical Bureau (CSB) also published GDP data characterized by expenditure up until 2022, offering a different perspective on Kuwait’s economy. In 2020, amidst the pandemic, private consumption (-11%) and total investment (-36%) fell sharply, contributing to that year’s near-5% decline in real GDP.

Private and government consumption led the recovery in 2021, while investment saw little change (+1.8%). Exports drove the continued recovery in 2022, a year when Kuwait’s oil output and exports recorded double-digit increases amid a tight market impacted by Russia’s invasion of Ukraine.

Cuts to Capex

Investment surged 44% in 2022 from a low, Covid-affected base, but in real terms, it remained below pre-Covid levels. This trend was reflected in successive government budget cuts to capex, which fell from a peak of KD3.8 billion ($12.43 billion) in FY19/20 to KD2.5 billion in FY23/24.

This trend reinforces what other figures suggest about Kuwait’s post-Covid economic recovery, largely driven by consumer spending and oil exports. Gross investment (public and private), at 17% of GDP in 2022, will need to increase substantially if the government is to succeed in its reform and economic diversification goals.

The release confirms previous indications that Kuwait’s economy recovered to its pre-pandemic size more quickly than originally thought. Nominal GDP reached KD42.9 billion ($143 billion) in 2021 from KD33.6 billion in 2020, increasing by 28% year-on-year, largely due to surging oil prices which propelled oil GDP up by more than 67%. However, GDP declined to KD50.3 billion (-9.8%) in 2023, reflecting changes in oil GDP. Consequently, per capita income dropped to $33.7k in 2023, partly due to this fall and an increase in population (+2.3% year-on-year according to PACI data).

External Shocks

The modest growth in the non-oil economy since the Covid-19 pandemic, averaging +0.8% per year compared to a pre-pandemic average of 3.3% (2010-2019), highlights a sector performing well below its potential in recent years. This underperformance reflects a succession of challenging external shocks, including the pandemic, oil price volatility, and aggressive global central bank monetary tightening. Despite traditionally high levels of government spending, non-oil performance in Kuwait has lagged behind some of its GCC peers.

To close the performance gap with neighboring Gulf economies, changes in the composition of public spending, emphasizing capital investment, will be necessary. The private sector‘s role must be significantly enhanced, with the government providing regulatory tools, incentives, and initial capital to help businesses expand and deepen the non-oil base, driving long-term productivity gains. The new government has stated its intention to prioritize structural fiscal and economic reforms and accelerate the implementation of development plan projects.

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