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Daily Economic Update
22.07.2025Kuwait: Population pushes past 5 million for the first time. According to the latest biannual data release from PACI, Kuwait’s population reached 5.1 million at the end of June 2025, a rise of 3.7% y/y (2.6% at end-2024) and moving above the 5 million mark for the first time. Growth was the result of an historically unusual fall in the Kuwaiti population of 0.6% (to 1.55 million) – more the result of policy factors than a shift in underlying demographics – and a rise in the expatriate population of 5.6% (to 3.55 million). The expat population reached 69.6% of the total population, up from 68.6% at the end of 2024 though comparable to or slightly lower than the rates prevailing before the pandemic. Meanwhile on the labor market side, total employment growth accelerated to 3.2% y/y from 1.9% at the end of 2024. The growth was driven by a strong 4.4% rise in expat employment, with the latter carrying a heavy weighting due to accounting for 85% of all employment in Kuwait. Encouragingly, the private sector led the way in job growth at a solid 3.7% (an even stronger 6.1% if domestic workers are excluded) versus a subpar 0.7% for the public sector. The implied unemployment rate among Kuwaiti nationals dipped to 6.2% from 6.6% at the end of 2024. Strengthening growth in private employment reverses a slowing trend of the past two years and supports recent reporting from the S&P Global PMI series, where the employment component – although not booming – hit a series high in June.
Qatar: Fiscal deficit widens slightly in Q2 2025 but remains low. Official figures reveal that the government recorded its second consecutive quarterly fiscal deficit in Q2 2025, widening to a still relatively small QR757 million ($208 million; <1% of pro-rated GDP) on faster spending growth. Expenditures rose 6% y/y, lifted by 11% growth in salaries & wages and a 3% increase in other current spending items. Major capital spending fell 4%, though it grew steadily on a quarterly basis in H1 2025 following a sharp drop in H2 2024. Meanwhile, revenue growth was muted as hydrocarbon receipts dropped 17% y/y, owing to lower energy prices: for example, Brent futures averaged $66.7/bbl in Q2, a 20% y/y drop (with gas prices often contractually linked to oil prices). Nevertheless, the decline was offset by higher non-hydrocarbon revenues, which includes the collection of corporate/business income, up 37% y/y. To help cover the deficit the government issued debt, a trend that will likely continue in the near term as oil prices hover around current levels and with debt-to-GDP at a sustainable level of 42%. The small deficit is unlikely to shift the calculus behind the government’s overall spending operations, especially when taking into account the large windfalls expected from the completion of the expansion works on the North Field East project by mid-2026.
UAE: Federal government updates corporate and excise tax structures. The ministry of finance has announced new provisions allowing tax deductions for depreciation on investment properties held at fair value, allowing taxpayers to deduct the lower of the tax written down value or 4% of the property's original cost annually. The new rules apply to properties acquired both before and after the introduction of corporate tax. This reform is poised to enhance post-tax returns, improve investor confidence, and align the corporate tax regime with international standards. Meanwhile, the government announced a major revision to the excise tax structure applied to sugar-sweetened beverages introducing a new tiered volumetric model that links the tax per liter to the beverage’s sugar content to ensure alignment with national public health priorities and dietary behavior.