The Central Bank of Kuwait announced that global credit rating agency Moody’s has reaffirmed Kuwait’s long-term sovereign credit rating at A1, maintaining a stable outlook, citing the country’s strong financial position and substantial economic buffers.
In a statement carried by Kuwait News Agency (KUNA), the Central Bank said Moody’s highlighted Kuwait’s robust fiscal strength, which provides significant protection against external shocks and supports long-term credit stability.
The agency pointed to Kuwait’s high per capita income and large oil reserves as key factors underpinning the country’s economic resilience and strong position in global energy markets.
Strong financial buffers support stability
Moody’s said Kuwait’s extensive sovereign financial assets play a crucial role in limiting the impact of regional geopolitical tensions on its credit profile. The agency noted that these assets provide flexibility to absorb potential declines in oil revenues without undermining fiscal stability.
According to the report, the government’s financial reserves are sufficiently large and accessible to help sustain public spending even during prolonged periods of reduced export income.
The rating agency also emphasized that higher global energy prices and recovery in oil production would support a faster fiscal rebound once trade flows through strategic routes, including the Strait of Hormuz, normalize.
Fiscal resilience and economic outlook
Moody’s stated that Kuwait’s sovereign assets strengthen creditworthiness through multiple channels, including fiscal sustainability, liquidity support, and mitigation of geopolitical risks by cushioning shocks from oil revenue volatility.
The agency projected non-oil sector growth of around 1.5% in 2026, driven by continued government infrastructure spending and relatively limited exposure to vulnerable sectors such as tourism and aviation.
On the fiscal front, Moody’s estimated that Kuwait’s budget deficit could widen to approximately 21% of GDP in FY 2026/2027, before narrowing to below 7% in FY 2027/2028, assuming a recovery in oil production and export flows to pre-conflict levels.
Outlook remains stable
Moody’s concluded that Kuwait’s strong financial assets and oil wealth continue to provide a solid foundation for its sovereign credit profile, enabling the country to withstand external pressures while maintaining long-term fiscal and economic stability.
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