Kuwait: S&P ‘upgrades rating’ from negative to stable

Kuwait: S&P ‘upgrades rating’ from negative to stable

Kuwait - S&P Global Ratings on Friday placed Kuwait’s currency sovereign credit ratings at A+, raising the Gulf country’s future outlook from “negative” to “stable.” In its report, the ratings agency expected the major oil exporter to benefit from favorable oil prices and production until the end of next year. It also forecasted a 2022-23 cumulative general government surplus of 18 per cent of GDP based on an USD 75-80 oil price, saying this would allow authorities to “replenish liquidity in the previously depleted main treasury buffer.”

The report expected Kuwaiti authorities over the next two years to adopt measures to diversify its income sources, “so that the previous fiscal funding impasse with the depletion of liquidity at the GRF (General Reserve Fund) does not recur, even if oil prices fall below current levels.” The agency said it “could lower” Kuwait’s rating if no sustainable comprehensive financing arrangements are made over the next three years. “This could happen, for instance, because of ongoing tensions between the government and parliament, rendering the government unable to implement fiscal reforms, pass the debt law, or authorize other necessary budget-financing mechanisms,” it warned.

This rating may be raised, it also said, “if the government successfully implemented