Higher oil prices and increased crude oil production ensured a bonanza for Kuwait’s main export and the state budget, while a brighter outlook resulting from the regime change in Iraq and from increased government spending provided a solid boost to domestic activity. Optimism and ample liquidity were evident in the continued boom in local stock and real estate markets, though the gain in share prices was somewhat more modest compared to 2003.
Iraq-related business activity remained vibrant, with local companies garnering a significant share of contracts awarded by coalition forces and the provisional authority. Though the traffic of foreign companies using Kuwait as a launching pad for their activities in Iraq slowed down significantly with the deteriorating security situation there, the flow remains significant enough to lift demand for local services.
