By Abdullah Al-Khateeb KUWAIT, Feb 9 (KUNA) -- Progress achieved in financial reform programs and clarity of Kuwait's economic vision have positively reflected on Kuwait's economic ratings by leading global financial institutions and rating agencies.
The ratings, starting with the international Bretton Woods institutions, passing through international credit rating agencies, and extending to reports by the Financial Action Task Force (FATF), the International Monetary Fund (IMF) and the World Bank, boosted confidence in the economy.
This collective progress contributes to reshaping the international perception of the Kuwaiti economy - not merely as an asset-rich economy, but as one that is gradually moving toward more efficient and sustainable resource management.
Economists, in separate statements to Kuwait News Agency (KUNA), said specialized international ratings and assessments reflect a tangible improvement in the performance of the Kuwaiti economy and confirm that it is proceeding along a sound economic path.
The experts explained that Kuwait's economy was currently undergoing a transition from managing stability to managing growth in the coming phase, which requires shifting from maintaining short-term stability to creating sustainable growth drivers by empowering the private sector, stimulating high-quality investment and developing labor market.
Chairman of the Board of the Union of Investment Companies, Abdullah Al-Turkait, said positive indicators issued by specialized international institutions, like IMF and World Bank, reflect a tangible improvement in Kuwait's economic performance and confirm it was on a path of gradual recovery and more balanced growth.
This, he said, reflected soundness of economic policies and the state's ability to manage challenges.
Al-Turkait added that recent international reports indicate how the positive shift in how international institutions view Kuwait's economy reflects a high level of confidence in reforms, as well as the Kuwaiti economy's ability to adapt to regional and global changes, particularly amid volatility related to energy markets.
He stated IMF expects Kuwait's economy to return to a growth trajectory in 2025, recording real growth of 2.6 percent, with continued improvement in 2026 driven by recovery of economic activity and increased contribution from non-oil sectors.
The World Bank, meanwhile, expected sustained growth of around 2.2 percent in 2025 and 2.7 percent in 2026.
Al-Turkait noted that the improvement in economic indicators reflects the continuity of Kuwait's reform efforts to improve the investment climate, simplify procedures, and develop the legislative and regulatory environment, thereby enhancing long-term economy's competitive attractiveness.
He added that these reports were based on an objective reading of several factors, most notably improved financial stability and the adoption of a balanced monetary policy that supports growth without leading to significant inflation increases.
IMF estimates inflation would decline to 2.3 percent in 2025, compared to about 2.9 percent in 2024.
Al-Turkait explained that Kuwait's international credit ratings continued to improve and remain stable over the past year, reflecting strength of its financial position and external standing.
He pointed out that Standard & Poor's raised Kuwait's sovereign rating in November 2025 to "AA-" with a stable outlook, based on progress in financial reforms and the enactment of legislation supporting financial sustainability-most notably the financing and liquidity law-along with efforts to diversify non-oil revenue sources.
He emphasized that this improvement and stability in credit ratings directly reduce the cost of sovereign and corporate financing, enhance international investor confidence and improve Kuwait's ability to lure foreign direct investment (FDI), thereby supporting sustainable economic growth over the medium and long term.
On the domestic level, he said these positive indicators directly enhance investor confidence, help accelerate development projects, improve the business environment and support the private sector.
He noted that FDI inflows into Kuwait increased by eight percent year-on-year, reaching 223 million Kuwaiti dinars (approximately USD 725 million) during the 2024-25 fiscal year, reflecting the attraction of foreign capital across various sectors, particularly in light of investment-friendly reforms.
Al-Turkait considered that the key factors driving international institutions to present a positive picture of Kuwait's economy include progress in financial reform programs, clarity of economic vision, increased focus on diversifying income sources, reducing reliance on oil and strengthening the role of the private sector in economic development.
For his part, Secretary-General of the Kuwaiti Economic Society, Mohammad Al-Jouan, affirmed international institutions' positive idicators were not based on impressions, but rigorous quantitative models and analyses of financial, monetary and structural trends.
Their positive stance toward Kuwait, he said, reflects recognition of the Kuwaiti economy's ability to absorb shocks and maintain stability in a highly volatile global environment.
Al-Jouan explained that the impact of these indicators goes beyond media coverage and directly affects investor behavior, sovereign financing costs, and confidence of international financial institutions.
In practical terms, these assessments enhance Kuwait's investment appeal to long-term institutional investors, support fair pricing of sovereign risk in debt and financing instruments and give policymakers greater room to maneuver economically without immediate market pressure.
Al-Jouan stated that the key factors contributing to the improved outlook of international institutions toward Kuwait's economy can be summarized in six interrelated pillars.
The first was improved fiscal discipline and more efficient management of financial surpluses, reflecting the state's ability to manage economic cycles with greater flexibility.
The second was the robustness of the banking sector and its operation under an advanced supervisory framework led by the Central Bank of Kuwait, in line with international best practices for risk management and governance.
The third factor, he said, was gradual progress in institutional reforms and enhanced transparency, particularly in disclosure and financial governance. The fourth was monetary policy stability and the Kuwaiti Dinar's peg to a basket of currencies, which has strengthened monetary policy credibility and reduced volatility.
He pointed out that two fundamental factors had a direct impact on changing the international assessment. The first was adoption of strategic fiscal decisions, most notably the passage of the public debt law. Previously, global rating agencies viewed the state's solvency as heavily concentrated in the Future Generations Fund, with limited flexible financing tools, which placed pressure on the sovereign rating despite strong assets.
The shift in this approach helped rebalance assessments of the state's financing capacity.
The sixth factor, he said, was intensified government efforts at the highest levels-under wise guidance from the political leadership to combat corruption and reduce waste in the public budget.
This is a critically important element in international assessments, as it reflects the state's seriousness in protecting public funds, improving spending efficiency and strengthening confidence in financial management.
Al-Joudan noted that these combined developments have helped reshape the international view of Kuwait's economy not only as an asset-rich economy, but as one that is gradually moving toward more efficient and sustainable resource management.
Regarding future expectations, Al-Jouan said that maintaining a positive outlook depends on three main paths: accelerating structural reform and diversifying the economic base away from oil; activating and empowering the private sector as a true engine of growth, and transitioning from managing stability to managing sustainable growth.
He added if reform momentum was maintained, Kuwait was likely to see further gradual improvements in ratings and indicators. However, if implementation slows, indicators will remain positive in terms of fundamentals but may lose relative momentum compared to more rapidly transforming regional economies.
He explained that future expectations for international economic indicators related to Kuwait remain cautiously and deliberately positive, closely linked to the speed and depth of reform implementation on the ground.
Al-Joudan said indicators were likely to improve further if reform momentum continues, particularly in financial, legislative and institutional areas-while maintaining fiscal discipline and efficient resource management.
He pointed to the recent positive assessment issued by the Financial Action Task Force (FATF) in the area of combating money laundering and terrorism financing, stressing that this evaluation should be treated as a starting point rather than an endpoint, through addressing technical observations and strengthening effective implementation.
He clarified that progress in this area was directly reflected as a positive indicator for credit rating agencies as well as the World Bank and IMF when assessing the strength of the state's institutional and financial framework.
Enhancing international credibility and compliance with governance and financial transparency standards raises global confidence and reduces what is known as reputational risk, an indirect but influential factor in creditworthiness assessments.
Al-Jouan stated that the upcoming transition from managing stability to managing growth requires moving from maintaining financial stability to creating sustainable growth drivers through empowering private sector, stimulating high-quality investment and developing capital markets.
If the results of the FATF report are practically leveraged alongside the completion of structural reforms, Kuwait is likely to witness further improvement in indicators.
Meanwhile, Professor of Economics at Gulf University for Science and Technology, Dr. Osama Al-Falah, said that international economic reports are among the most neutral tools for evaluating countries' economic performance, as they are largely based on numerical data and precise technical indicators, lending credibility and objectivity to their results.
Dr. Al-Falah added that Kuwait's positive evaluations from prominent international institutions such as the IMF, World Bank and global credit rating agencies reflects an improvement in domestic economic reality, and enhances confidence among investors and stakeholders.
He explained that these institutions praised Kuwait's ability to maintain large fiscal surpluses and substantial reserves, alongside stable inflation rates and the return of growth in non-oil sectors.
He noted that this positive assessment reflects distinguished national expertise and specialized cadres managing economic affairs in both the public and private sectors.
He said that Kuwait has been a pioneer in launching leading projects, and from this standpoint, the positive shift in international institutions' view of Kuwait's economy enhances optimism for a sustainable future based on diversification, innovation and good governance, in line with Kuwait Vision 2035.
Dr. Al-Falah emphasized that international economic reports play a pivotal role in supporting local economy, as they serve as key references for major companies, financial institutions and governments when making investment decisions.
When such institutions release positive reports about a country, they open broad horizons for attracting foreign capital and enhance the country's appeal as a reliable economic hub.
He stated that Kuwait, thanks to its financial stability and strong institutions, has become more qualified than ever to attract high-quality investments, especially amid better credit ratings that reflect an improved business environment and the implementation of fundamental reforms.
He said several structural and institutional changes have driven international institutions to adopt a positive view of Kuwait's economy, most notably enactment of public debt law, which reorganized government borrowing, seeing tangible progress in diversifying income sources, improved performance of non-oil sector and stable inflation rates. (end) ak.eng