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International financial bodies closely following up dev on Public Debt Law

Bid to lend long-term, short-term loans

KUWAIT CITY, Sept 13: According to reliable government sources, several international banks and financial institutions have contacted Kuwait to affirm their readiness to lend long-term and short-term loans based on the state’s financial needs, reports Al-Qabas daily. They explained that the country’s financial strength resulting from its huge reserves in the future generations fund enhances its potential for the international lenders. The sources indicated that major international banks are closely following up the direction of the public debt law, which allows the government to borrow KD 20 billion for a period of 30 years.

They highlighted the enthusiasm of international financing agencies to lend loans to Kuwait as soon as the law is passed, due to the strength of its financial status, which is reflected in the ratings of international agencies as well as the size of its low debt, amounting to KD 4.1 billion as of March 31, 2020, in addition to Kuwait’s ranking among the ten countries with lowest sovereign debt relative to GDP, as per the International Monetary Fund (IMF).

The sources said, “International banks are awaiting developments in the public debt law discussions and following up its conclusion either through parliament – if there is government-parliamentary agreement on the recent amendments – or through an urgent decree at the end of the current parliament’s term.

They stressed that the Kuwaiti sovereign debt is still the lowest among the Gulf Cooperation Council countries, which are expected to borrow about USD 100 billion during the current year to finance their budget deficits. The sources said they are expecting a recovery in the issuance of Gulf debt instruments in the next two years in light of the widening deficit in government budgets and the increasing requirements for refinancing.

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