Kuwait

Kuwait is located on the northwestern coast of the Arabian Gulf, bordered by Saudi Arabia to the south and Iraq to the north. The country is about the size of the German state of Saxony. Kuwait has a population of around 4.4 million, with most of the inhabitants living in the metropolitan area of the capital, Kuwait City. Approximately 70% of the population consists of expatriates.

Kuwait is a monarchy with strong parliamentary participation. While the country is conservative, its political system is one of the most open in the region, with members of parliament able to openly criticize the ruling Sabah family. The head of state is Sheikh Mishal al-Nawaf al-Sabah, who ascended to the throne after the passing of his half-brother Sheikh Nawaf in 2024. Kuwait is a member of the United Nations, the Arab League, the Gulf Cooperation Council (GCC), and other regional and international organizations.

Kuwait is financially very strong, primarily due to its vast oil reserves. It has the sixth-largest proven oil reserves in the world, just behind Iraq, and is the ninth-largest oil-producing country globally. Oil profits account for about half of Kuwait’s GDP and approximately 90% of government revenues. Germany is one of Kuwait’s key trading partners, importing mainly (petro)chemical products, while German exports to Kuwait mainly consist of machinery, motor vehicles and parts, and electrical engineering. The bilateral trade balance stands at 1.048 billion euros, making Germany Kuwait’s 6th largest import partner. Kuwait has also invested heavily in companies like Daimler, a partnership that has lasted for nearly 50 years, and was honored as the company’s most reliable partner in 2014.

In January 2017, Kuwait introduced the ambitious “New Kuwait” strategy, aiming to set new economic priorities and transform the country into the region’s leading trading and financial hub by 2035. This development plan focuses on large-scale infrastructure and tourism projects, including the construction of a metro, a new railroad line, and the expansion of airports and power plants. The economy faced challenges during the Covid-19 pandemic, with a contraction of 8.9% in 2020, mainly due to the low oil prices. However, a recovery of 8.7% is expected for 2022, driven by the diversification of the economy beyond oil, with further growth anticipated in the coming years.