S&P has Kuwait at stable

Standard and Poor's yesterday awarded sovereign credit rating of "AA-/A-1+" to Kuwait, supported by its rich resource endowment which enabled the country build strong external and fiscal balance sheet position in recent years.

The outlook is stable. "In our view, these strengths comfortably balance some short-term risks linked to the decline in oil prices, oil production cuts and lower non-oil real GDP growth, and increased contingent liabilities from the financial system," S&P's credit analyst Luc Marchand said.

Net external assets – primarily the accumulation of oil revenues held externally through Kuwait's sovereign wealth fund – are projected to reach 425 per cent of current account receipts (CARs) in 2009, underscoring robust external balances. On the fiscal side, the government's net asset position is similarly robust, projected at about 250 per cent of GDP by year-end.

Despite the decline in oil prices, the Kuwait budget should again record a surplus of 12.3 per cent of GDP in fiscal 2009-2010.END