Standard & Poor’s confirms Kuwait AA- rating, stable outlook maintained

KUWAIT CITY, May 22: The Central Bank of Kuwait has announced that Standard & Poor’s (S&P) has affirmed Kuwait’s long-term sovereign credit rating at AA- and short-term rating at A-1+, maintaining a stable outlook. In a statement carried by Kuwait News Agency (KUNA), the Central Bank said the assessment reflects confidence in Kuwait’s strong financial position, supported by substantial external assets that help the country withstand regional geopolitical risks, including disruptions linked to the Strait of Hormuz.

S&P noted that Kuwait’s financial buffers provide resilience against potential shocks to global trade and energy flows, assuming such disruptions remain temporary. However, the agency projected a slight economic contraction of around 2 percent in 2026 due to reduced oil production linked to regional tensions, followed by a recovery to about 3 percent growth between 2027 and 2029 as oil output stabilizes and non-oil investment programs expand. On the fiscal side, S&P expects budget deficits to average around 14 percent of GDP during 2025/26–2028/29, while inflation is projected to remain moderate at about 3 percent, supported by the dinar’s exchange rate regime and government subsidy measures. The report also highlighted the resilience of Kuwait’s banking sector, noting strong asset quality and adequate buffers to withstand external financial pressures.