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Kuwait

Last Updated: 1 August, 2024
Kuwait is located on the northwestern coast of the Arabian Gulf and is about the size of Saxony. The country borders Saudi Arabia to the south and Iraq to the north. It has about 4.4 million inhabitants, most of whom live in the metropolitan area of the capital Kuwait City. About 70 percent of the inhabitants come from abroad.
Kuwait is a monarchy with strong parliamentary participation. While it is a conservative society, its political system is the most open one in the region with members of parliament able to openly criticize the ruling Sabah family. The head of state has been Sheikh Mishal al-Nawaf al-Sabah since the passing of his half brother Nawal in 2024. Kuwait is a member of the UN and the Arab League, the Gulf Cooperation Council and other regional and international organizations.
Because of its oil wealth, Kuwait is financially very strong. Kuwait has the sixth largest proven oil reserves in the world, just behind Iraq, and is the ninth largest oil producing country in the world. Oil profits account for about half of GDP and 90 percent of government revenues. Germany imports mainly (petro)chemical products from Kuwait. German exports consist mainly of machinery, motor vehicles and parts, chemical products, machinery and electrical engineering. Germany’s foreign trade balance with Kuwait is 1.048 billion euros and Germany is Kuwait’s 6th largest import partner. The state has invested in Daimler for nearly 50 years and was honored in 2014 as the company’s most reliable partner. Kuwait has also tapped into a large export market in Asia.
In January 2017, the government unveiled the large-scale New Kuwait strategy, with which the country aims to set new economic priorities and become the trading and financial center in the region by 2035. The development plan currently focuses on infrastructure and tourism, the construction of a metro and a railroad line, and the expansion of airports and power plants. Due to the Covid 19 pandemic and the associated low oil price, Kuwait’s economy faced major challenges and contracted by 8.9 percent in 2020. However, a strong recovery of 8.7 percent is expected in 2022, driven primarily by the diversified economy outside of oil sales. Further economic growth is predicted for the years to come.

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