Kuwait must implement huge fiscal package
The report said that Kuwait's economy had been affected by the worldwide economic turmoil to a "milder extent", and predicted a further slowdown is expected in 2009.
The report emphasised how Kuwait leaders need to put together a stimulus package of increased spending on development and housing projects, especially on infrastructure projects such as the airport, hospitals, roads, oil and gas projects and power plants.
It also said that the implementation and execution of the package should be free of bureaucratic hassles, to prevent any delay to helping the economy's current problems.
NBK said that Kuwait, like others, had put out fires last year (supporting Gulf bank, helping investment companies).
The report said, "In our view, fiscal stimulus is needed at a time when the oil sector and the private sectors are expected to retrench."
The report also suggested that the Kuwait government could use the budget to raise spending, especially on projects and infrastructure, as well as shoring up confidence by pumping liquidity into the local market.
The analysis shows that if the price of Kuwait export crude was to average $30-60 a barrel, and with no change in government spending, real gross domestic product (GDP) would fall by 4-5 per cent this year.
NBK said that Nominal GDP would decline by 20-40 per cent and the declines would not be confined to the oil sector, with the non-oil sector falling in real terms by 2-3 per cent.