Kuwait’s Strong Financial Assets Secure ‘A+’ Rating from Standard & Poor
In a recent report, Standard & Poor affirmed Kuwait’s sovereign rating with a stable outlook, highlighting the nation’s impressive government financial assets that support around 418 percent of the GDP in 2024.
Despite Kuwait’s lagging structural and financial reforms, S&P anticipates a 2.4 percent real GDP growth between 2025-2027, compared to a 2.3 percent contraction in 2024. This growth is expected to be driven by easing restrictions on oil production.
The report also emphasized the acceleration of government investment projects, focusing on public-private partnerships and high-impact projects aligned with the New Kuwait 2035 vision to transform Kuwait into a financial and trade hub.
With a substantial stock of government financial assets projected to reach 447 percent of the GDP between 2024-2027, Kuwait’s future outlook remains stable, assuming robust financial and external balances.
S&P stated that Kuwait could see a credit rating increase with successful implementation of structural reforms to diversify the economy away from the oil sector. These financial assets are crucial in mitigating economic risks associated with the country’s heavy reliance on oil.
Kuwait’s low levels of government debt and significant general government net asset position, largely through KIA funds, contribute to its strong financial standing.
However, S&P cautioned that a downgrade in Kuwait’s sovereign credit rating could occur if fiscal imbalances rise significantly, due to weaker oil prices or the absence of fiscal reforms without comprehensive financing arrangements.