Daily Economic Update

Kuwait: Business and household credit growth at 4% and 3%, respectively, in 2024. Domestic credit increased by 0.5% in December, driving up growth to 3.7% in full-year 2024, more than double the 1.7% increase recorded in 2023. Unlike historical trends, business credit growth was solid in December (0.4% m/m), resulting in a 4% increase in 2024, a sharp improvement from 0.8% in 2023. December saw a steep divergence in growth across the different sectors with solid momentum in real estate, oil/gas, and other services but contraction in construction, industry, and trade. In line with 2023, the construction and trade sectors were the fastest growing in 2024 at 7.9% and 7.3%, respectively. Growth for the heavyweight real estate sector recovered sharply to 6.8% in 2024 from 1.3% in 2023. Meanwhile, the recovery in household credit continued, with growth in December at 0.3%, resulting in a 2024 increase of 3%, double the 1.5% recorded in 2023. The bulk of that increase happened in the second half of the year with annualized growth over the past six months reaching 4.2%. For 2025, we expect growth in business and household credit to be similar to 2024, with the possible approval of a housing finance law a key upside risk to household credit growth in future. Meanwhile, driven by another jump in the volatile public-institution deposits in December, resident deposits finished the year growing by 3.6%, similar to the 3.9% recorded in 2023. However, the growth in private-sector deposits rebounded to 4.5% in 2024 from 1.1% in 2023. In contrast, the increase in government deposits decelerated sharply to 5.7% in 2024 after a 37% surge in 2023. Within private-sector KD deposits, CASA decreased by a limited 1.1% in 2024 while time deposits increased by 8.5%, a much narrower differential compared with 2023.

Chart 1: Kuwait credit growth (% y/y) Source: Central Bank of Kuwait

Egypt: PM gives directions to list military owned companies on the stock exchange. Prime Minister Moustafa Madbouly directed officials and other ministers to speed up the process and to prepare a clear plan and timeline for listing military owned companies on the stock exchange. Additionally, he directed the Investment Minister, Hassan El Khatib, to follow up on the progress of these listings. Earlier during 2024, the PM said the government will focus on four main companies as a start which are Wataneya, bottled water company Safi, food manufacturer Silo Foods, and fuel retailer Chill Out. As of now, it is expected that the Wataneya IPO will be done by mid-2025 and the others more towards the end of the year. It is worth noting that the plan to list these companies has been in place for several years, but hurdles including market conditions, the domestic economic situation, and company-specific legalities have prevented the listings from happening. We see implementation of the above listings as helping boost market confidence in the government’s intention to withdraw from economic activities as part of the reform process.    

Saudi Arabia: Import growth remained steep in November. The trade surplus fell to SR16.9 billion in November from SR30.3 billion one year ago (-44% y/y) as higher imports continued to outweigh the decline in exports. Import growth remained high, up 13.9% y/y driven mostly by imports of machinery, electrical equipment and transport equipment, linked to vision 2030 megaprojects. On the other hand, exports fell 4.7% y/y mainly on the ongoing steep decline in oil exports (-12.3%) including refined products, despite a continued strong positive trend in non-oil export and re-export growth (20% and 10%). We expect the trade surplus to have declined to SR287 billion (7.1% of GDP) in 2024, down from 10.6% of GDP in the previous year and could narrow further in 2025, given the risk of a delayed recovery in oil exports and the likely continued strong growth in investment-linked imports.

US: President Trump reiterates universal tariff threats. President Trump said he intends to impose blanket tariffs to ‘protect the country’ and they would be “much bigger” than the 2.5% mentioned in previous media reports. Earlier, Treasury secretary Bessent seemed to have pushed for a gradual introduction of a 2.5% tariff rate, which would rise by similar amounts every month to reach up to 20%, in order to allow businesses and exporters time to adjust. Trump’s latest pledges offer a stark reminder that despite a softer-than-expected and mostly targeted approach on tariffs during his first week of presidency, threats of across-the-board duties haven not fully vanished. In data news, new home sales rose 3.6% m/m in December following a 9.6% rise in November. For the year 2024, new home sales increased by 2.5%, slowing from 3.9% growth in 2023. US housing activity has remained under some pressure in recent periods amid worsening affordability due to rising home prices (up by 30-50% across sectors since end-2019) and elevated mortgage rates (around 7% currently). However, the inventory of housing units has also been rising steadily, which should help keep a lid on price rises ahead, especially in the new home segment.

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