The Future Path of the Kuwaiti Economy by Yussef AL-Ibrahim & Ismail Siraj Eldin Despite the unprecedented economic growth and structural changes in the Kuwaiti economy during the 1960's and 1970's Kuwait faced several internal and external factors that posed constraints on its development during 1980's. These factors include a drop in both oil world demand and prices, a continuous increase in both public and private consumption despite the decline in government revenues, the disturbing impact of the Gulf War (invasion is not included), deterioration in Kuwaiti-non Kuwaiti population ratios and deficit in the balance of payments. This paper attempts to identify these factors. and analyse their effects on the future path of the economy up to the end of the century on the basis of Kuwait macro-economic model. The study argues that these conditions will lead to an increase in structural imbalances and a further decline in the growth and stability of the economy, unless appropriate strategies and policy measures are taken. It concludes with a general framework for development strategy of [to] rectify these imbalance. It also, provides a set of policy measures, and tests its effects on the performance of the economy during the period 1985-1990.