Latest News
- HH The Amir To Attend World Teachers' Day Honoring Ceremony
- The Civil Service Bureau Prepares To Retire Long-serving Employe...
- Non-Kuwaiti Teachers To Be Hired For New Academic Year By Minist...
- Permits For Houses Over 18 Meters High Are Froze By The Municipa...
- Ministry Of Health Amend 'nature Of Work' Allowance For Nursing...
- Kuwait Institute For Scientific Research Registers 3.0 Richter S...
- Ethiopian Domestic Worker Illicit Baby Dies After Birth
- 8,000 Kuwaitis Apply For French Visas In 2024 1st Quarter
- Kuwait's Medicine Shortage Raises Eyebrows
- Increases In The Prices Of Fish
- Kuwait Launched Plans For A State-of-the-art New Cancer Control...
- Work Permits Will Be Issued For One Year Under The New Mechanism...
Kuwait's Sovereign Rating Confirmed By Fitch Ratings: Insights And Outlook
The Central Bank of Kuwait has revealed that Fitch Ratings has reconfirmed the sovereign rating of the State of Kuwait at (AA negative) with a stable outlook. This reaffirmation is underpinned by robust financial conditions and a remarkably strong external balance.
In a statement to Kuwait News Agency (KUNA), the central bank highlighted key points from the Fitch report, emphasizing the challenges posed by heavy dependence on the oil sector and the substantial size of the public sector. These factors, while currently manageable, may pose long-term sustainability challenges.
Fitch's report also addressed ongoing financial and economic stagnation, along with delays in legislative approvals related to financing sources and debt issuance permits.
The State of Kuwait's new technocratic government has outlined a work program spanning 2024-2027 aimed at enhancing non-oil revenues, restructuring support, and promoting private sector involvement to create job opportunities for Kuwaiti nationals while easing financial burdens. Additionally, a new liquidity bill has been proposed to facilitate debt issuances, following the expiration of previous authorizations in 2017.
Regarding government debt, Fitch Ratings noted that while the debt-to-GDP ratio remains low at 3.1 percent in the fiscal year 2023-2024, it is projected to increase to 11 percent by 2025-2026, assuming the liquidity law is passed. This projection factors in limited public financial control and low oil prices.
Fitch anticipates a return to a 5 percent GDP deficit in the current fiscal year, reversing the surplus recorded a decade earlier. The agency projects deficits of 6.5 percent and 10 percent in fiscal years 2024-2025 and 2025-2026, respectively, driven by declining oil prices and ongoing public spending pressures.
The report outlines factors that could lead to a downgrade, including increased pressure on the General Reserve Fund's liquidity and failure to adopt a new liquidity law or alternative measures. Similarly, continued decline in oil prices or failure to address structural strains on public finances could also trigger a downgrade.
Conversely, improvements in the rating could result from the state's ability to address long-term financial challenges, implement deficit reduction plans, and adopt transparent and sustainable government financing strategies.
Trending News
-
Kuwait Implements Home Biometrics Services Ahead O...
14 April 2024
-
Kuwait Airways Provides Update On Flight Schedule...
14 April 2024
-
Kuwait Airways Introduces Convenient Home Luggage...
15 April 2024
-
Expat Residency Law Amended By Kuwait Ministerial...
20 April 2024
-
Two Expats Are Arrested For Stealing From Salmiya...
17 April 2024
-
Kuwait Airways Resumes Flights To Beirut And Oman...
15 April 2024
-
Temperature Increases Cause Electricity Load Index...
21 April 2024
-
Thief Returns Stolen Money With An Apology Letter...
15 April 2024
-
3 Expats Caught In Salmiya With 213 Bottles Of Loc...
23 April 2024
-
Ministry Of Interior Denies Social Media Rumors Re...
13 April 2024
Comments Post Comment