Kuwait's high oil prices and increased production have enabled the government to continue to record high fiscal and external surpluses and build strong buffers, the International Monetary Fund (IMF) said in a report. The IMF showed in its report, released after its Executive Board concluded Article IV consultation with Kuwait on November 25, that "overall real non-oil gross domestic product (GDP) growth is projected to increase modestly to three percent in 2013, driven by an increase in domestic consumption and pick-up in public investment." It showed that "the overall average consumer price inflation (CPI) is projected at three percent in 2013," whereas the fiscal and external surpluses are projected at 27 percent of GDP and 39 percent of GDP, respectively, in 2013. Monetary policy has remained "accommodative" and bank credit growth has "picked up," while bank profitability has remained "stable and soundness indicators appear strong." The Fund indicated that "banks had an average capital adequacy ratio of 18. 3 percent (Tier I capital of 16.6 percent) at end-June 2013." Gross nonperforming loans declined to 4.6 percent at end-June 2013 from 5.2 percent at end-2012. Banks had a provisioning ratio of 107 percent at end-June 2013. Some investment companies continued to record losses in 2012, though of a lower order compared to 2008; a few of these are "still deleveraging and restructuring their balance sheets." The economic outlook is expected to "improve further" in 2014 and over the medium term as non-oil growth is expected to increase to 4.4 percent in 2014 "supported by public capital spending," driving average inflation to 3.5 percent. Fiscal and current account surpluses are expected to remain large in 2014. Over the medium term, non-oil growth is projected to accelerate to about five percent as "large infrastructure investments are expected to support the growth momentum." Executive Directors "welcomed Kuwait's recent economic performance," as high oil prices and increased production have "enabled the build-up of large fiscal and external buffers, and the non-oil sector is continuing its recovery. " Meanwhile, the outlook is subject "to risks from global and regional developments, and the economy remains highly oil-dependent," where directors therefore "encouraged the authorities to make further efforts to promote economic diversification, particularly in areas with potential for greater national employment." Directors noted that while the fiscal position is strong, "a sustained period of low oil prices could deplete fiscal surpluses. "To contain risks, free up resources for increased capital spending, and to save for future generations, Directors agreed that it will be important to restrain current expenditure growth and to enhance non-oil revenues." Furthermore, directors agreed that the current accommodative monetary stance remains "appropriate and the exchange rate peg to a basket has provided a strong and credible monetary anchor." They noted that the banking system is "well regulated and resilient to shocks, and welcomed continued steps to strengthen financial regulation and supervision." They affirmed that "continuous refining of the macro-prudential toolkit and greater central bank autonomy would enable the authorities to better deal with systemic risk." Directors cautioned that "the recent large consumer debt relief program could give rise to moral hazard," also calling for "the completion of the restructuring process and a review" of the investment companies sector. Directors welcomed the recent passage of "important legislation that will enhance the investment climate and forge partnerships with the private sector, and encouraged further steps in this direction." To foster Kuwaiti employment in the private sector, Directors underscored the "need to contain public sector wage and employment growth, enhance educational quality, further promote female labor force participation, and create an enabling environment for small and medium enterprises." Directors also encouraged "continued efforts to improve effectiveness in public administration, and the establishment of an independent Financial Intelligence Unit."