Kuwait’s ratings are underpinned by strong macroeconomic fundamentals and a large net external creditor position.
Capital Intelligence Ratings (CI Ratings) has affirmed its AA- issuer ratings on Kuwait’s long-term foreign currency (LT FC) and long-Term local currency (LT LC) with a stable outlook.
In a statement, CI Ratings stated that the ratings are supported by a relatively low fiscal breakeven oil price, a high GDP per capita as well as a sound banking system and low government debt.
However, the ratings remain constrained by the country’s reliance on hydrocarbons, institutional weaknesses as well as difficult policymaking environment, limited data disclosure and geopolitical risk factors.
Kuwait’s economy is expected to continue expanding at a healthy annual average of 2.7 per cent in 2019-20, fuelled by higher government spending on infrastructure projects and increased oil production (2.87 million barrels per day in 2019 compared to 2.75 million barrels in 2018).
In GCC, Kuwait enjoys the lowest fiscal oil price among its neighbour states at $47.4 per barrel. The oil-rich country’s large financial buffers and substantial room for borrowing as well as the public finances have weathered the period of low oil prices and remain in better shape than in many GCC peers.