Kuwait Sovereign Ratings Affirmed; Outlook Remains Stable

Rating Action

Capital Intelligence Ratings (CI Ratings or CI) today announced that it has affirmed the Long-Term Foreign Currency Rating (LT FCR) and LT Local Currency Rating (LT LCR) of Kuwait at ‘A+’. At the same time, CI Ratings has affirmed the sovereign’s Short-Term (ST) FCR and ST LCR at ‘A1’. The Outlook on the ratings remains Stable.

Rating Rationale

The ratings are supported by very strong external finances, including very high current account surpluses, the substantial financial assets of the Future Generations Fund (FGF), and strong external debt capacity. The ratings also take into account the country’s large hydrocarbon reserves, very high GDP per capita, very low level of central government debt, and resilient banking sector.

The ratings continue to be constrained by the country’s heavy reliance on hydrocarbons, high geopolitical risk factors, and weak budget structure including limited revenue diversification and very high expenditure…