Fitch Ratings: Kuwait's IDR at AA- with Stable Outlook

The Fitch Ratings stated that Kuwait’s Long-Term Foreign-Currency Issuer Default Rating (IDR) is at AA- with a Stable Outlook.

"We forecast Kuwait’s sovereign net foreign asset position will average 470 percent of GDP in 2022-2024, the highest among all Fitch-rated sovereigns and more than 10x the ‘AA’ median.” Finch Ratings stated. “Gross government debt/GDP is low and we expect it to fall below 10 percent of GDP in the fiscal year ending March 2023 (FY22) against a ‘AA’ median of 49 percent. However, assuming the passage of a debt law, limited fiscal reform and lower oil prices, we forecast government debt will double to 20 percent of GDP in FY24 and rise further in subsequent years.” it added.

According to a Fitch Ratings statement, Kuwait’s key credit strengths are its exceptionally strong fiscal and external balance sheets.

Factors that could, individually or collectively, lead to positive rating action/ upgrade including structural features/public finances displaying evidence that Kuwait’s institutions and political system are able to tackle long-term fiscal challenges, for example, through actions to implement a clear deficit reduction plan that is resilient to lower oil prices, as well as adopting a transparent and sustainable government funding strategy. (KUNA)