RIYADH: Kuwait has had their long-term foreign-currency issuer default ratings, or IDR, downgraded from ‘AA’ to ‘AA-‘ by Fitch Ratings.
The downgrade comes as a result of the ongoing political constraints on decision-making that is contributing to structural challenges in the Gulf state.
Despite national dialogue held to address some points of dispute with the opposition, political divisions linger and are expected to prevent a reform in Kuwait’s fiscal rigidities.
Since 2017, the Gulf state has been under discussions regarding a debt law, reflecting the slow processes of decision-making.
Upon approval of the debt law, the credit rating company projects a rise in Kuwait’s debt to around 50 percent of gross domestic product, up from the current 10 percent.
The Kuwaiti government has been trying to pass a new public debt law to ease liquidity shortages in the country, with the parliament repeatedly blocking the bill.