Kuwait’s non-oil private sector contracted more sharply in June, driven by a combination of rising input prices and persistent regional geopolitical tensions that have dampened business confidence and demand.
The latest purchasing managers’ index data reveals a deepening slowdown in the kingdom’s diversified economic segments, marking a renewed period of pressure for firms outside the energy complex.
The decline in both overall business activity and new orders underscores the transmission mechanism of West Asia instability into the real economy.
As shipping risks in the Strait of Hormuz remain elevated and diplomatic friction persists, Gulf businesses are facing higher operational costs and greater uncertainty, which is suppressing investment and consumption plans.
This development adds to the growing evidence that the regional conflict is no longer confined to energy supply chains but is beginning to impact broader macroeconomic indicators across the Gulf Cooperation Council.
The contraction in Kuwait’s non-oil sector comes as Iraq signals potential friction within OPEC, with Baghdad considering an exit from the cartel if production quotas are not significantly increased.