After an eight-year gap, Kuwait is now able to borrow from international markets, following the enactment of a new law.
According to the state-run Kuna news agency, the law establishes a public debt ceiling of KD30 billion ($97.4 billion) and permits the issuance of financial instruments with maturities of up to 50 years. This move aims to enhance financial stability and drive economic growth in alignment with the Vision 2035 strategy.
The previous legislation governing public debt and liquidity expired in 2017, leaving Kuwait without a framework for borrowing. The updated law allows for debt issuance in various currencies, facilitates public debt and liquidity management, and is expected to support the country’s sovereign credit rating while safeguarding its financial reserves and stimulating economic activity.
Earlier in the month, Fitch Ratings noted that the long-awaited approval of the draft financing and liquidity law would increase Kuwait’s fiscal flexibility and eliminate a potential credit risk. However, the agency also pointed out that Kuwait could still fulfill its financial obligations even without the law, thanks to its substantial assets.
Additionally, Kuwait recently approved its budget for the fiscal year 2025-26, projecting a higher deficit due to lower anticipated oil revenues. The Arabic-language daily Al-Anba reported that non-oil revenues are expected to rise by nearly 9%, reaching approximately KD2.9 billion compared to KD2.68 billion in the previous fiscal year (2024-2025).
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