Kuwait (Business News Report) – Standard & Poor’s credit rating agency has maintained Kuwait’s current rating at (A+) with a negative outlook.
The real GDP will grow by 8% this year, driven by the increase in oil production under the OPEC+ agreement, Standard & Poor’s expected.
It also expected that the average budget deficit in Kuwait would reach 12% of GDP until 2025.
Standard & Poor’s
The budget deficit comes despite the high prices and oil production, which is among the highest rates among all countries classified by the agency.
Standard & Poor’s noted that relations between the executive and legislative authorities began to improve after the national dialogue. This increases the possibility of passing the Public Debt Law and the Public Financial Consolidation Plan.
Standard & Poor’s saw the possibility of downgrading Kuwait’s credit rating if the high budget deficit persists in the medium term, in the absence of comprehensive, sustainable and agreed financing arrangements.
Financial reforms
The agency added that this could happen in the event of the ongoing confrontation between the government and the National Assembly, which makes the government unable to implement financial reforms, pass the public debt law, or authorize other sources of deficit financing.
Standard & Poor’s indicated that the rating outlook could change to stable if the government succeeds in addressing the current restrictions on financing the public budget. This is done by approving the Public Debt Law and authorizing the government to benefit from the Future Generations Reserve Fund and the Public Financial Control Program.
In a separate context, the Kuwait Stock Exchange ended the current year 2021, with significant gains for all indicators.
The gains of the Kuwait Stock Exchange reflect the market’s full recovery from the repercussions of the pandemic, Kuwaiti newspaper Al-Qabas said.
