Boston, MA -- (SBWIRE) -- 06/08/2012 -- BMI's Q212 Kuwait Retail Report forecasts that the country's retail sales will grow from an expected KWD2.36bn (US$8.78bn) in 2012 to KWD3.52bn (US$13.10bn) by 2016, despite the persistence of small-scale political discontent in the country. Key factors behind the forecast growth in Kuwait's retail sales are a favourable long-term economic outlook, a sophisticated consumer base and high levels of disposable income.
Kuwait's nominal GDP is predicted to be US$170.71bn in 2012, with real GDP growth of 5.4% projected. Average annual GDP growth of 3.9% is forecast by BMI between 2012 and 2016. With the population estimated to rise from 2.9mn in 2012 to 3.2mn by the end of the forecast period, GDP per capita is predicted to grow to US$63,929 by 2016.
Approximately 80% of the Kuwaiti population are expatriates, while foreign workers crossing the border from Iraq also stimulate the retail market.
In 2005, 73.8% of the Kuwaiti population was described by the UN as economically active, with 37.9% in the 20-44 age range important to retail sales. In 2010, an estimated 74.6% of the population was active, while the proportion of those in the 20-44 age range reached an estimated 39.4%.
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A very high level of urbanisation is also contributing to a vibrant retail sector. In 2005, more than 96% of the population was classified by the UN as urban and this is forecast to increase to almost 99% by 2015. According to Arabianbusiness.com, by the end of 2010 the gross leasable area (GLA) in Kuwait's retail sector was estimated to be 1.15mn square metres (m2), compared with the 345,000m2 in use in 2006.
Property consultancy Colliers International expected Kuwait to have the third-largest supply of retail space in the Gulf by 2010.
According to BMI data, retail sub-sectors that are predicted to show strong growth over the forecast period include consumer electronics. Youthful population demographics, a regional economic boom and a buoyant real estate sector are all expected to drive growth. Sales are forecast to increase by almost 21%, from an expected US$1.03bn in 2012 to US$1.32bn by 2016.
High per capita income is also likely to mean vehicle sales increase by nearly 19% over the forecast period, from an expected 129,683 units in 2012 to 154,076 units by 2016, with strong demand for highend passenger cars.
Over-the-counter pharmaceutical sales are forecast to grow by nearly 30% from US$0.12bn in 2012 to US$0.16bn by 2016.
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