Moody’s Investor Service has downgraded Kuwait’s sovereign credit rating to A1, a decline of two levels. This follows a March downgrade by Standard & Poor’s Global Ratings. “The decision to downgrade the ratings reflects both the increase in government liquidity risks and a weaker assessment of Kuwait’s institutions and governance strength,” Moody’s said in a statement. “The fractious relationship between parliament and the executive is a long-standing constraint on Moody’s assessment of institutional strength. The deadlock over the government’s medium-term funding strategy and the absence of any meaningful fiscal consolidation measures point to more significant deficiencies in Kuwait’s legislative and executive institutions and policy effectiveness than previously assessed.” It noted that the government’s domestic challenges do not enable the country to issue debt or draw on its sovereign wealth fund assets in its Future Generations Fund. Without this, it said, “available liquid resources are nearing depletion…. despite the country’s extraordinary fiscal strength.”
Kuwait Suffers Further Credit Downgrade
Posted By The Media Line Staff On In News Updates
Sign Up for Mideast Daily News
Wake up to the Trusted Mideast News source
By subscribing, you agree to The Media Line terms of use and privacy policy.