Kuwait makes new law to control public borrowing, sets $97.4B debt limit
Kuwait has passed a new law to manage public borrowing. It sets a debt limit of $97.4 billion (KWD 30 billion) as the country plans to borrow from international markets again after eight years.
Debt Ceiling
A new law announced on Wednesday allows Kuwait to issue financial instruments (like bonds) that can last up to 50 years, according to the country’s finance ministry, as reported by Kuwait News Agency (KUNA).
Finance Minister Noora Al-Fassam said this law will help Kuwait work with both local and international markets to better manage its finances. The move is part of the government’s plan to strengthen the economy and support Kuwait’s Vision 2035. It is also an important step in making the economy more stable and less dependent on oil.
Faisal Al-Muzaini, the Director of Public Debt Management, explained that the law allows Kuwait to borrow money in Kuwaiti dinars or foreign currencies. This gives the government more flexibility in managing its debt. He also said the law will help develop Kuwait’s financial market by setting a benchmark for future government and corporate borrowing, making it cheaper to take loans.
According to Al-Muzaini, the law will help fund major projects, such as infrastructure and other important developments. It is expected to boost the economy by increasing investor confidence, attracting foreign investment, and creating more business opportunities. Another benefit is that it may improve Kuwait’s credit rating, allowing the country to borrow money under better conditions. It also aims to protect the country’s financial reserves.
Kuwait last issued bonds in 2017. For years, the government has struggled to pass a new debt law because of disagreements between parliament and the cabinet.
Oil Revenue Drop
Kuwait’s oil revenue dropped by about $10 billion (KWD 3.1 billion) last year to $69.8 billion (KWD 21.5 billion). This was due to lower oil prices and production cuts by OPEC+, even though Kuwait exported more high-value refined products. Meanwhile, non-oil revenue was $6.8 billion (KWD 2.11 billion), according to the Middle East Economic Survey (MEES).
Kuwait’s Budget Deficit
The Kuwaiti government has said that spending needs to be controlled to manage budget growth. For the 2024-2025 fiscal year, Kuwait is expected to have a budget deficit of $18.33 billion (KWD 5.6 billion). The government plans to spend $79.5 billion (KWD 24.5 billion), while revenue is expected to be $61.9 billion (KWD 18.9 billion).
For the 2023-2024 fiscal year, which ended on March 31, Kuwait had a budget deficit of $5.2 billion (KWD 1.6 billion). This is a big change from the previous year when the country had a surplus of $20.9 billion (KWD 6.4 billion).
Credit Ratings
Kuwait’s current credit rating is AA- with a stable outlook from Fitch Ratings. S&P Global Ratings has given Kuwait an A+ rating with a stable outlook.
Published: 28th March 2025
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