S&P Global Affirms Kuwait’s Rating at ‘A+’ with Stable Outlook

A view of Kuwait City. (Reuters file)
A view of Kuwait City. (Reuters file)
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S&P Global Affirms Kuwait’s Rating at ‘A+’ with Stable Outlook

A view of Kuwait City. (Reuters file)
A view of Kuwait City. (Reuters file)

S&P Global affirmed on Tuesday Kuwait’s long-term credit rating at “A+” with a stable outlook, forecasting the country’s economy to grow 2% in 2025-2026.

In its latest report, the US-based agency said that due low oil prices and large expenditure, Kuwait is forecast to run a high fiscal deficit in the upcoming two to three years.

“Amid less favorable economic conditions due to global trade tensions and weaker oil prices, Kuwait’s large stock of external public-sector assets should provide a buffer for a policy maneuver, if needed,” said S&P Global.

The report further noted that Kuwait’s fiscal deficits will remain elevated, averaging around 8.9% of gross domestic product from 2025 to 2028, compared to 2% in 2024.

“Kuwait's fiscal deficits will remain elevated as subdued oil prices and high expenditure levels, particularly on wages and subsidies, continue to weigh on public finances,” S&P said.

It also assumed Brent oil prices of $65 per barrel in 2025 and $70 per barrel beyond then.

The agency said fiscal deficits are forecast at 6% of GDP on average by 2028 from around 14% in 2025 due to a modest increase in production during 2027-2028 and government efforts to increase non-oil revenues.

“S&P Global is recognizing that Kuwait is undergoing technical preparatory work for several fiscal reforms, including corporate income tax, production tax, subsidies rationalization, and improved government procurement,” it noted, adding that the government is seeking to increase non-oil revenues through raising taxes and improving revenue collection through digital transformation.

The agency stressed that one key development is the recent passage of the Financing and Liquidity Law, which enables the government to tap capital markets for the first time since 2017.

“Our base case assumes that government capital expenditure and part of the fiscal deficit will be partially funded via debt issuance. We forecast issuance of about $10 billion in 2025 and about $5 billion of debt annually in 2026-2028,” the agency added.

Meanwhile, S&P warned that potential indirect effects of low oil prices and global policy uncertainty could dampen growth in Kuwait.

It said the US administration imposed a 10% tariff on Kuwaiti exports to the US, but imports of oil, gas, and refined products, which constitute the majority of Kuwait's exports, were exempt from the new measures.

The agency stated that it expects Kuwait’s economy to grow 2% in 2025-2026, compared to a 2.7% forecast, while rebounding to 2.6% in 2027-2028 as oil output rises.



China Retaliates to EU Ban with Import Restrictions on Medical Devices

People walk along Qianmen promenade in Beijing on July 5, 2025. (Photo by Adek BERRY / AFP)
People walk along Qianmen promenade in Beijing on July 5, 2025. (Photo by Adek BERRY / AFP)
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China Retaliates to EU Ban with Import Restrictions on Medical Devices

People walk along Qianmen promenade in Beijing on July 5, 2025. (Photo by Adek BERRY / AFP)
People walk along Qianmen promenade in Beijing on July 5, 2025. (Photo by Adek BERRY / AFP)

China's finance ministry said on Sunday it was restricting government purchases of medical devices from the European Union that exceed 45 million yuan ($6.3 million) in value, in retaliation to Brussels' own curbs last month.

Tensions between Beijing and Brussels have been rising, with the European Union imposing tariffs on China-built electric vehicles and Beijing slapping duties on imported brandy from the bloc.

The European Union said last month it was barring Chinese companies from participating in EU public tenders for medical devices worth 60 billion euros ($70 billion) or more per year after concluding that EU firms were not given fair access in China.

The measure announced by the European Commission was the first under the EU's International Procurement Instrument, which entered into force in 2022 and is designed to ensure reciprocal market access.

China's countermeasures were expected after its commerce ministry flagged "necessary steps" against the EU move late last month.

"Regrettably, despite China's goodwill and sincerity, the EU has insisted on going its own way, taking restrictive measures and building new protectionist barriers," Reuters quoted the commerce ministry as saying in a separate statement on Sunday.

"Therefore, China has no choice but to adopt reciprocal restrictive measures."
The EU delegation office in Beijing did not immediately respond to a request for comment.

China will also restrict imports of medical devices from other countries that contain EU-made components worth more than 50% of the contract value, the finance ministry said. The measures come into force on Sunday.

The commerce ministry said products from European companies in China were not affected.

The world's second- and third-largest economies are due to hold a leaders' summit in China later in July.