RIYADH: Fitch Ratings has affirmed Kuwait’s long-term foreign-currency issuer default rating at AA- with a stable outlook, citing the country’s strong fiscal and external balance sheets.
The rating is supported by Kuwait’s substantial financial buffers, which the Kuwait Investment Authority manages. Yet Fitch warned that reliance on hydrocarbons, an oversized public sector, and governance scores that lag peers remain key risks.
Public wages and subsidies account for 41 percent of gross domestic product, or 81 percent of government spending.
The agency said Kuwait’s external balance sheet remains the strongest among all Fitch-rated sovereigns. “We forecast its sovereign net foreign assets will rise to 607 percent of GDP in 2025, from an estimated 576 percent in 2024, more than 10x the ‘AA’ median,” Fitch said.
“Prospects remain uncertain for meaningful structural reforms to reduce reliance on oil revenue,” even as the government proceeds with gradual spending rationalization and other reform measures, Fitch’s latest rating said.
