More than 56,000 expats left the country in the first half of 2021, pushing the total departures to about 190,000 since the start of the pandemic, the National Bank of Kuwait said in its Economic Update report on 14 September.
Following the biggest annual drop recorded in almost 30 years (-2.2%) in 2020, Kuwait's population decreased by a further 0.9% in the six months to 1H21 to 4.62 million.
This is mainly due, it said, to a continued fall in the number of resident expatriates, while the number of Kuwaiti nationals continued to rise.
More expat workers are expected to leave in the coming period, as the pandemic fallout and Kuwaitization efforts continue to push companies to shed workers amid a weaker economic environment”
The ongoing enforcement of Kuwaitization policies and the weak economic environment caused by the pandemic forced companies to shed workers, pushing thousands of expat households to leave the country.
After a drop of 4.2% y/y in 2020, total employment declined by 1.7% 6m/6m in 1H21. This is attributed to moderation in hiring activity among Kuwaiti nationals and a drop in expat
Employment growth among Kuwaitis moderated from 2.1% in 2020 to 1.3% in 1H20, driven mainly by a decline in the private sector (-1.5% or about 940 Kuwaitis). However, the public sector kept its hiring apace (+1.8% or about 6,200 Kuwaitis) partly due to Kuwaitization efforts.
"Such hiring will add pressure to the budget with the wage bill alone accounting for about 60% of total spending", the bank said.
In contrast, expatriate employment dropped by 2.2% in 1H21 after a drop of 5.2% in 2020, on the back of low hiring activity in both the public (-2.2%) and private sector (-2.8%).
However, domestic (i.e. household) workers' employment was less affected, as their numbers decreased only by 1.1% in 1H21.
The government allowed domestic helpers to enter the country once flights resumed (even if they are not vaccinated).
Excluding domestic workers, expat employment decreased by 2.7%, led by a decline in hiring activity.
"Looking ahead, and while some of those expats who are stuck outside Kuwait may return with the resumption of flights, generally more expat workers are expected to leave in the coming period, as the pandemic fallout and Kuwaitization efforts continue to push companies to shed workers amid a weaker economic environment", it concluded.