LOC11:20
08:20 GMT
Report by Ahmad Abdelsattar
KUWAIT, Nov 26 (KUNA) -- Kuwait's recent upgrade by Standard & Poor's (S&P) to a sovereign credit rating of AA- with a stable outlook marks a pivotal moment in the country's economic trajectory, reflecting the cumulative impact of wide-ranging reforms and structural transformation carried out over the past year.
S&P's decision represents a strong vote of confidence in Kuwait's economic direction, the agency highlighted that the reforms undertaken by the government have strengthened the fiscal framework, enhanced liquidity management, and created a more predictable environment for long-term financial planning.
The improved rating is expected to support greater foreign investment inflows, boost investor confidence, and enhance the competitiveness of Kuwait's development projects regionally and globally.
During its weekly meeting on Tuesday, chaired by Sheikh Ahmad Abdullah Al-Ahmad Al-Sabah, the Cabinet affirmed its commitment to implementing the vision of Sheikh Meshal Al-Ahmad Al-Jaber Al-Sabah, pushing ahead with reforms to attract foreign investment and improve the business climate, aiming to transform the country into a regional and global financial and commercial hub.
The Cabinet reiterated its support for ongoing financial reforms intended to raise Kuwait's sovereign credit rating on international indices and assured that it will meet current and future requirements to ensure fiscal sustainability.
It assigned the tasks of reporting every six months on developments in Kuwait's sovereign credit rating to Minister of Electricity, Water and Renewable Energy and Acting Minister of Finance and Economic Affairs Dr. Sabeeh Al-Mukhaizeem.
S&P also pointed to Kuwait's substantial financial assets, managed by Kuwait Investment Authority, and ongoing reform momentum as key factors that strengthen Kuwait's fiscal resilience and reduce dependence on hydrocarbons.
The agency highlighted major infrastructure and capital projects such as the northern economic zone, a new port, energy projects, a new international airport terminal, new residential cities, and a free economic zone as evidence of the state's long-term economic transformation.
The momentum behind Kuwait's reform agenda accelerated significantly since mid-2024, with a synchronized program covering economic, financial, legislative and structural areas, where these reforms seek to build a modern, flexible and sustainable economic model aligned with Kuwait Vision 2035, while enabling the country to respond effectively to fast-evolving global challenges.
A central milestone in this process was the enactment of Law No. 60 of 2025, known as the Liquidity and Financing Law, which provides a comprehensive framework for managing liquidity needs and supporting public finances.
The law enables the state to adopt diversified financing tools and ensures smoother fiscal operations, helping reduce pressure on public spending during periods of fluctuating oil revenues.
In parallel, Kuwait implemented the global minimum tax on multinational corporations earlier this year, making it one of the first regional economies to adopt the international tax framework endorsed by the G20 and OECD.
This move strengthens Kuwait's commitment to transparency, enhances integration with global markets, and diversifies non-oil revenues.
Complementing these legislative reforms is the anticipated approval of the Sukuk Law, which will provide Kuwait with an additional sovereign financing instrument and create new opportunities for Islamic finance investment, where these measures aim to build a robust fiscal foundation that supports long-term stability and growth.
The government has also advanced several structural initiatives aimed at optimizing national resources and improving efficiency across key sectors, including efforts to reprice state land assets to maximize economic value, rationalize subsidies to direct support to eligible beneficiaries, and enhance performance standards within the public sector to raise productivity and service quality.
To strengthen the investment climate, the government introduced the real-estate brokerage system to improve transparency and reduce irregular practices in property transactions.
It also launched the smart licensing project, implemented key steps for the real-estate developer ecosystem, and advanced capital-market modernization initiatives to attract institutional investment.
On the development front, Kuwait recorded its highest quarterly development spending in five years during the first quarter of the 2025-2026 development plan, reaching KD 132.4 million (USD 434 million).
The government is currently implementing 373 ongoing development projects in addition to 69 new ones planned for the upcoming fiscal year.
Notable flagship projects include the Umm Al-Haiman Wastewater Expansion, the new passenger terminal at Kuwait International Airport, and Phase One of Mubarak Al-Kabeer Port, expected to be completed in 2028.
The Cabinet recently directed ministries and state agencies to expedite procedures for signing major project agreements with several partner governments in sectors such as construction, transportation and logistics, these steps are part of Kuwait's broader strategy to reinforce international partnerships and mobilize global expertise to support national development priorities.
Kuwait also intensified high-level economic and technical engagements in recent months, resulting in accelerated legal and technical reviews for major projects and deeper cooperation with China through specialized joint committees that monitor project execution, evaluate investment opportunities, and support the exchange of developmental expertise.
In the monetary sector, the Central Bank of Kuwait (CBK) continues to anchor the Kuwaiti dinar to a basket of currencies, providing a strong foundation for price stability and limiting inflationary pressures, this policy supports the dinar's position as a reliable store of value and contributes to monetary stability.
Meanwhile, reforms in the investment and tourism sectors have strengthened Kuwait's attractiveness as a destination for global companies, visa facilitation measures, infrastructure upgrades, and the development of new tourism facilities have stimulated activity in the sector.
Major international firms, including Google Cloud and BlackRock, have expanded operations in Kuwait, reflecting confidence in the country's economic transformation and digital-economy ambitions.
The government also launched the Government Performance Management System to promote accountability, strengthen governance, improve service quality, and enhance transparency across ministries and state agencies, where these measures support long-term efforts to counter administrative inefficiencies and reinforce integrity.
Kuwait's economic performance has already shown positive indicators, with the national economy recording 1.3 percent growth in the first half of 2025, international organizations expect this trend to continue, supported by ongoing reforms and rising capital investments.
S&P emphasized that Kuwait's substantial financial assets, coupled with reform momentum, will mitigate risks associated with reliance on the oil sector and potential volatility in energy markets.
The agency added that Kuwait's fiscal and external balances will remain among the strongest globally over the medium term.
Minister of Electricity, Water and Renewable Energy and Acting Minister of Finance and Economic Affairs Dr. Sabeeh Al-Mukhaizeem said the upgraded sovereign rating reflects the positive impact of Kuwait's structural and fiscal reforms.
He affirmed that the government remains committed to advancing economic diversification, strengthening revenue sources, and ensuring long-term financial sustainability.
Kuwait's comprehensive reform roadmap represents a transformative st