Oil Price Scenarios: Economic and Fiscal Impacts on the Kuwait Economy

Sedat Dizmen
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Sedat Dizmen: The Supreme Council for Planning and Development

A chapter in Handbook of Research on Emerging Theories, Models, and Applications of Financial Econometrics, 2021, pp 109-140 from Springer

Abstract: Abstract This chapter examines major highlights on macroeconomic and fiscal issues affecting the Kuwaiti economy based on different oil price assumptions. Forecast, analysis and simulations are performed using the Kuwait SCPD macro model. For the Kuwait economy, the author has explored three scenarios corresponding to a low, medium and high oil price assumptions. The author analysed a price fall particularly in 2019–2020, which is a stylized representation of the oil market change over the horizon 2030. Unsurprisingly, the results show that such an oil price drop has direct effects in Kuwait, since Kuwait’s export is dependent on oil. By researching the relationship of oil prices to oil sector dependence, it becomes evident that Kuwait has a large portion of oil-related sectors in the economy and that indicates high elasticity of both GDP and government revenues to oil prices.

Keywords: Macroeconomic model; GDP growth; Oil GDP; Non-oil GDP; Revenue; Expenditure; Fiscal balance; Government revenue oil; Government revenue non-oil (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-030-54108-8_5

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DOI: 10.1007/978-3-030-54108-8_5

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