Kuwait credit rating cut for second time in two years by S&P

SourceGulf Business
SectorFinancial Markets
CountryKuwait

Kuwait was downgraded by S&P Global Ratings for a second time in less than two years after a fall in oil revenue and increased spending pressured the Persian Gulf nation’s fiscal outlook. The sovereign credit rating was cut one level to A+ from AA-, the fifth-highest investment-grade level, according to a statement Friday. S&P now rates Kuwait two notches lower than Fitch Ratings and on par with Moody’s Investors Service, which lowered its own assessment of the country last year for the first time.

S&P’s outlook for Kuwait is negative. “The downgrade reflects the persistent lack of a comprehensive funding strategy despite the central government’s ongoing sizable deficits,” according to S&P analysts. “We consider that these persistent delays could ultimately leave Kuwait more vulnerable to potential future terms-of-trade shocks.” The rating agency downgraded the sovereign in March 2020, citing materially lower oil prices. Although crude rebounded this year to more than $70 per barrel, a delay to proposed laws...read more...