Lending to construction, real estate, oil grew in the first half • WAMD payments continue to climb
KUWAIT: Kuwait’s banks continued to expand lending during the first half of 2026 despite a sharp slowdown in import financing, as temporary central bank measures helped cushion the sector from regional instability. The Central Bank of Kuwait introduced a package of temporary regulatory measures in March to support banking stability as geopolitical tensions persisted. The measures eased liquidity and capital requirements, giving banks greater flexibility to continue lending during a period of heightened regional uncertainty and helping sustain the flow of credit to the economy.
According to data released by the Central Bank this month, total utilized cash credit facilities rose from KD 63.74 billion at the end of December 2025 to KD 64.93 billion by the end of June 2026, an increase of 1.9 percent. The figures measure the amount people and businesses have actually drawn from approved bank credit lines, including loans, overdrafts and other financing. Credit growth was concentrated in several key sectors.
Lending to the construction sector recorded the fastest growth, rising 13 percent from KD 2.83 billion to KD 3.20 billion over the six-month period. Financing for the crude oil and gas sector also increased by 8.5 percent to nearly KD 3 billion. Real estate lending rose by more than KD 448 million to reach KD 11.36 billion, remaining the second-largest borrowing sector after personal facilities. In contrast, loans extended to banks declined 17.4 percent, falling from KD 5.42 billion to KD 4.48 billion.
Import financing drops
Bank financing for imports fell sharply during the first half of the year. Trade financing declined from KD 996.2 million in December to KD 259.9 million in June. The decline coincided with weaker import activity. According to the latest data from Central Statistical Bureau, Kuwait’s merchandise imports totaled KD 570.6 million in March, down 45 percent from KD 1.04 billion in the same month a year earlier. The data is a significant reversal of the growth trend observed throughout 2025.
The slowdown was broad-based across major categories, with the most severe declines occurring in transport and consumer products. Imports of transport equipment fell 73.4 percent year-on-year, followed by consumer goods, down 48.3 percent, capital goods, down 46.5 percent, and food and beverages, which declined 41.6 percent.
While overall imports were down, one major trade partner bucked the trend. Imports from Saudi Arabia rose 80.3 percent from a year earlier to reach KD 95,839 million in March 2026. China remained Kuwait’s largest source of imports despite a 48.7 percent decline in shipments at KD 105,307 million. The decline came during a period when the US-Iran war disrupted shipping through the Strait of Hormuz, increasing freight costs and affecting regional trade flows, although the data does not directly link the two.
WAMD continues to grow
While trade financing weakened, domestic payment habits remained mostly stable. Electronic consumer spending inside Kuwait slipped only slightly from KD 4.52 billion in December to KD 4.50 billion in June, a decline of around 0.5 percent. How the money was spent changed more significantly. Transactions through the WAMD instant payment service rose from KD 903.3 million in December to KD 1.03 billion in June, surpassing the KD 1 billion mark for the first time in May.
Spending through point-of-sale terminals remained virtually unchanged at around KD 1.5 billion, suggesting retail activity was steady despite regional uncertainty. Online payments through payment gateways declined from KD 1.37 billion to KD 1.31 billion over the six months, while ATM withdrawals dropped from KD 751.7 million to KD 658.3 million, pointing to reduced reliance on cash.
Personal borrowing also continued to expand. Total personal facilities increased from KD 20.03 billion in December to KD 20.35 billion in June, with private housing loans accounting for much of the increase as outstanding balances rose to KD 17.69 billion. Spending by holders of foreign bank cards inside Kuwait also declined, falling from KD 10.2 million across 101,300 transactions in December to KD 8 million across 71,000 transactions in June. The decline came during a period when commercial flights were disrupted by temporary airspace closures, which likely affected visitor arrivals, though the central bank data does not directly link the two.