Ratings stable amid turmoil; Kuwait holds huge assets
KUWAIT CITY, April 3: Despite the unstable global economic and political conditions, there is a package of factors that support the stability of the country’s sovereign rating, foremost of which is the strong public budget and huge sovereign assets, as Kuwait’s rating is among the strong ratings in the region, as Standard & Poor’s granted it an A+ rating. Moody’s has an A1 rating, and Fitch has an AA- rating, reports Al- Qabas daily. According to international rating agencies, Kuwait has an exceptionally strong balance sheet that is among the strongest sovereign budgets that are rated, despite the sharp fluctuations in oil prices since 2014, as well as its possession of net foreign sovereign assets managed by the Kuwait Investment Authority amounting to about 470% of gross domestic product during 2022-2024.
The total government debt in Kuwait is among the lowest in the region, and it is expected that it will decrease to less than 10% of GDP in the fiscal year 2022-2023, noting that Kuwait’s budget has gone through several years of deficits. The stability of Kuwait’s sovereign rating is supported by expectations that the general budget for the year 2022- 2023 will record a surplus estimated at 5 billion dinars, although oil prices will remain the main factor in determining the level of surplus and deficit in the budget, with a decrease in the share of non-oil revenues.
It should be noted that there are no other factors that would support the sovereign rating, foremost of which is political stability and the creation of a state of consensus between the two authorities, especially with regard to economic files, foremost of which is the approval of the public debt law and the increase in spending on capital projects.
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