Bank financing for construction sector rises annually by $400mln in Kuwait

PHOTO

In April, the bank financing balance for the construction sector witnessed a significant annual increase of $400 million. However, local bank financing to the construction sector experienced a decline on a monthly basis, decreasing by 164.3 million dinars or 54.4%, reaching 137.4 million dinars compared to about 301.7 million dinars in March.

According to the monthly statistics issued by the Central Bank of Kuwait for April, financing for the construction sector increased by 2.4 million dinars or 2.4% annually totaling 135 million dinars in April 2023. The total financing provided by banks to the construction sector during the first four months of the year amounted to approximately 971.1 million dinars.

The accumulated balance of construction financing provided by local banks witnessed a slight monthly increase of 0.07%, totaling two million dinars from 2.820 billion dinars in March to 2.822 billion dinars in April. Additionally, the balance increased annually by 400 million dinars or 16.5% compared to April 2023 when it was 2.422 billion dinars. Throughout 2023, construction financing fluctuated, with notable increases and decreases.

The sector faced challenges such as a decline in project offerings, delayed payments to contractors, and rising construction costs due to labor shortages. The real estate market also experienced a decrease in both the quantity and quality of available labor, leading to a significant increase in daily wages for construction workers. On the other hand, private sector deposits in local banks increased by 0.8% in dinars, reaching 36.5 billion dinars (about 119.1 billion dollars) in April. Private sector deposits in foreign currencies rose by 0.9% to reach 1.9 billion dinars (about 6.1 billion dollars).

Meanwhile, government deposits in banks declined by 32 million dinars to reach 4.616 billion dinars compared to 4.648 billion dinars in March. Overall, the statistics indicate a slight increase in the total assets of local banks and a decrease in net foreign assets. The total balance of credit facilities for residents and non-residents increased to 54.873 billion dinars in April, compared to 54.521 billion dinars in March.

By Mahmoud Shendi
Al-Seyassah/Arab Times Staff