Kuwait’s sovereign rating reaffirmed with stable outlook

KUWAIT CITY, May 26: Standard & Poor’s and Moody’s, two of the leading credit rating firms in the world, reaffirmed the long-term sovereign credit rating of Kuwait with ‘stable’ outlook. They pointed out that the substantial financial holdings of Kuwait are vital to managing the regional consequences of the Middle East conflict and the related logistics challenges in the Strait of Hormuz. Commenting on this, two financial specialists underscored the significance of the fiscal strength of Kuwait, pointing out that protecting the economy from external shocks remains a priority.

Financial specialist Faisal Al-Harbi stated that the rating validation, particularly coming from such prominent global institutions, highlights the superior creditworthiness of the Kuwaiti economy. He said the national economy proved its durability even when major European Union nations faced economic strain from regional hostilities and despite the three-month suspension of Kuwaiti oil exports during the peak of the war.

Economic advisor Abdullah Al-Gharib indicated that such an assessment serves as a testament to the economic fortitude of Kuwait amidst global instability caused by geopolitical strife. He attributed this strength to the sovereign wealth of the country and its evolving strategy on improving the business climate, reducing administrative barriers, and expanding revenue streams beyond traditional sources to boost national competitiveness. He said the local economy has a history of navigating difficult challenges, including the 2008 global crisis, market volatility, and invasions. “This enduring stability is anchored on huge crude oil reserves, exceeding 102 billion barrels, alongside the Future Generations Fund. Economic advisor Abdullah Al-Gharib affirmed that despite the economic fluctuations the world witnessed as a result of geopolitical tensions and their repercussions on the economies of major countries, the two agencies’ report confirms the resilience of the Kuwaiti economy amidst the winds of war.

“This resilience is driven by the sovereign reserves of the country and its strategy, which has begun to rely on numerous policies to diversify income sources, eliminate bureaucracy and red tape, and improve the business environment to make Kuwait more competitive. The national economy has overcome severe crises, such as the invasion, 2008 global financial crisis, and stock market crash. The strength of the Kuwaiti economy is based not only on the Future Generations Fund, but also on crude oil reserves exceeding 102 billion barrels,” he asserted.

Economist Ahmed Al-Sadhan stated that maintaining the sovereign credit rating under these circumstances reflects the strength and stability of the financial position of Kuwait and its ability to confront global economic challenges despite the war and tensions in the Arabian Gulf region. “This confirms the success of the monetary and fiscal policies spearheaded by the Central Bank of Kuwait in maintaining economic stability and international confidence in the Kuwaiti economy. This high rating is not just a financial indicator, but a message of reassurance to investors and global markets that Kuwait still possesses strong economic fundamentals supported by sovereign reserves and a robust banking sector,” he concluded.

By Najeh Bilal Al-Seyassah/Arab Times Staff