S&P Upgrades Kuwait’s Credit Rating to AA- with Stable Outlook

S&P Global Ratings has upgraded Kuwait’s sovereign credit rating to AA- / A-1+, citing accelerated progress on fiscal and economic reforms as well as improved financing conditions. 

The agency assigned a stable outlook, reflecting confidence in the country’s exceptionally strong balance sheet and external position.

In its assessment, S&P said the upgrade underscores the growing momentum behind Kuwait’s fiscal overhaul, including efforts to diversify revenue away from hydrocarbons and strengthen the government’s medium-term financing strategy.

According to the agency, the stable outlook is supported by expectations that Kuwait’s public and external balance sheets will remain extremely robust throughout the forecast horizon. 

The country’s large financial buffers, anchored by the assets of the Kuwait Investment Authority, continue to provide one of the strongest sovereign backstops globally.

S&P highlighted the government’s stepped-up commitment to implementing fiscal reforms, including measures to broaden non-oil revenue streams and improve long-term sustainability.

The agency also pointed to easing funding constraints, which have historically been shaped by political gridlock over public-debt legislation.

S&P expects Kuwait to continue developing a coherent medium-term funding plan, allowing the state to better manage liquidity needs and reduce its dependence on volatile oil revenues.

The upgrade aligns with broader signs of economic stabilization across Kuwait. The agency said the government’s reform agenda, combined with its powerful asset base, positions the country to maintain one of the strongest fiscal profiles in the region, even amid uncertainty in global energy markets.