LONDON: Ratings agency S&P has affirmed Kuwait’s credit rating, saying the outlook for the Gulf state is stable and that it will likely return to economic growth this year.
Kuwait’s real gross domestic product (GDP) contracted by 2.3 percent in 2017 but is set to grow by 2.5 percent this year, S&P said.
The agency affirmed its “AA/A-1+” long- and short-term foreign and local currency sovereign credit ratings on Kuwait, according to a statement.
Kuwait’s economy is “undiversified” because it derives about 60 percent of its GDP, more than 90 percent of exports, and about 90 percent of fiscal receipts from hydrocarbon products, S&P said. Oil-production cuts under the OPEC agreement “have weighed on Kuwait’s growth in 2017,” S&P added.
But Kuwait’s “stable” position, higher energy prices and expected rising oil production from 2019 are expected to offset such risks and create momentum, the agency said.
“Kuwait’s large government and external net asset positions will continue to afford the authorities space to gradually consolidate government finances,” it said.
“The stable outlook reflects our expectation that Kuwait’s public and external balance sheets will remain strong over the forecast horizon, backed by a significant stock of financial assets. We expect these strengths to offset risks related to lower oil prices, Kuwait’s undiversified economy, and rising geopolitical tensions in the region.”
S&P: Kuwait ratings affirmed, economy to grow this year
S&P: Kuwait ratings affirmed, economy to grow this year
