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S&P affirms Kuwait's credit rating at ‘AA’; Outlook stable

S&P affirms Kuwait's credit rating at ‘AA’; Outlook stable
Kuwaiti economy is still dependent on oil returns

Mubasher: Standard and Poor's (S&P) has affirmed Kuwait's credit rating at (AA) with a stable outlook, the Kuwait News Agency reported on Saturday.

The rating agency said that the Kuwaiti economy is still dependent on oil returns, which accounts for 90% of exports.

Therefore, the extension of OPEC+ output cut agreement will weigh on the GCC country’s economic growth.

Earlier in January, informed sources told Reuters that OPEC+ might extend its current oil production reduction agreement to June in case March meeting was postponed.

"The stable outlook reflects our expectation that Kuwait's public and external balance sheets will remain strong over the next two years, primarily underpinned by sizable foreign assets accumulated in the country's sovereign wealth fund," S&P noted.

S&P added that Kuwait has substantial savings of over 400% of GDP accumulated within its sovereign wealth fund.

Kuwait's net general government asset position is expected to reach 420% of GDP by the end of 2019, considered the highest ratio of all rated sovereigns, the rating agency maintained.