Kuwait downgraded for the first time as ‘liquidity risks’ escalate

Kuwait downgraded for the first time as ‘liquidity risks’ escalate

Kuwait has been downgraded for the first time by Moody's Investors Service, a decision the ratings agency said reflects the increase in the government's "liquidity risks".

The sovereign credit rating was cut two levels to A1, the fifth-highest investment-grade level and on par with China and Saudi Arabia, according to a statement on Tuesday. Moody's now ranks Kuwait two steps lower than Fitch Ratings and one below S&P Global Ratings, which lowered its own assessment of the country in March for the first time ever.

Moody's projects net sovereign issuance of up to KD27.6 billion ($90 billion) would be needed to meet the Kuwaiti government's funding requirements between the current fiscal year and the fiscal year ending March 2024. The rating company revised the outlook to stable, completing the review for downgrade