Global credit rating agency Moody’s has affirmed that Kuwait’s credit profile is underpinned by exceptionally large fiscal reserves, vast and low-cost oil and gas resources, and very high-income levels.
The Al-Rai daily, quoting sources, said it expects the country to maintain sizable current account surpluses under current oil price assumptions.
However, Moody’s cautioned that Kuwait’s heavy reliance on oil, exposure to carbon transition risks, and regional geopolitical tensions pose long-term challenges. Institutional hurdles have also limited the government’s ability to address these risks effectively.
The agency maintained a stable outlook, citing Kuwait’s strong reserves as a buffer against budget deficits and oil price fluctuations. These reserves also minimize the need for increased public debt.
Moody’s anticipates that the temporary suspension of Parliament may accelerate delayed reforms. While economic diversification is not factored into its base case, meaningful progress could reduce Kuwait’s vulnerability to oil price shocks and transition risks.
A credit rating upgrade would depend on significant advances in diversification and institutional effectiveness.
Moody’s assigned Kuwait an economic strength score of “a2”, reflecting its immense oil wealth and low production costs, but warned that global momentum toward carbon transition could weigh on future economic and fiscal stability.
