Kuwait Holds Its AA- Credit Rating as Sovereign Net Foreign Assets Near 600 Percent of GDP
Kuwait retains one of the strongest sovereign credit profiles in the world, holding an AA- rating with a stable outlook at both S&P Global and Fitch and A1 at Moody’s, even as it runs a widening budget deficit. The contrast rests on a balance sheet few states can match: Fitch estimates the country’s sovereign net foreign assets at around 607 percent of annual economic output in 2025, up from 576 percent a year earlier and more than ten times the median for similarly rated governments.
The ratings have held through a year of change. S&P raised Kuwait one notch to AA- in November 2025, citing the reform momentum behind a long-delayed public-debt law, and affirmed it again in May 2026; Fitch affirmed AA- in September, and Moody’s reaffirmed A1 in May, all with stable outlooks. The debt law, passed in 2025, ended roughly eight years in which Kuwait could not borrow and set a ceiling of 30 billion dinars, about 97 billion dollars.
| Indicator | Figure |
|---|---|
| S&P Global rating | AA- / A-1+, stable, affirmed May 2026 |
| Fitch rating | AA-, stable, affirmed September 2025 |
| Moody’s rating | A1, stable, affirmed May 2026 |
| Sovereign net foreign assets, Fitch estimate | about 607 percent of GDP in 2025, up from 576 percent |
| FY2025/26 revenue | 16.5 billion dinars |
| FY2025/26 spending | 23.6 billion dinars |
| FY2025/26 deficit | 7.1 billion dinars, about 23 billion dollars, up 13.2 percent |
| Public-debt ceiling, 2025 law | 30 billion dinars, about 97 billion dollars |
| Kuwait Investment Authority assets | not officially disclosed, externally estimated near 1 trillion dollars |
The strength lies in what Kuwait owns rather than what it earns. Kuwait recorded a deficit of 7.1 billion dinars, about 23 billion dollars, in the 2025/26 fiscal year, up 13.2 percent on the year, as revenue of 16.5 billion dinars fell short of 23.6 billion dinars in spending and oil income came in about 11 percent below budget. Yet on Fitch’s estimate the country’s sovereign net foreign assets are worth more than six times its annual economic output, our calculation from that figure, a buffer that lets a single year’s deficit be financed many times over. Most of those assets sit in the Future Generations Fund, managed by the Kuwait Investment Authority, whose total size the state does not officially disclose; outside trackers put it near a trillion dollars.
Why it matters: Kuwait is the clearest example of a state whose credit rests on wealth rather than cash flow. Years of budget deficits driven by swings in oil revenue have not dented its standing, because its external assets dwarf its obligations, a buffer the rating agencies repeatedly single out. The test the agencies flag is not solvency but reform: heavy reliance on oil and a large public wage and subsidy bill remain the long-term constraints, and the debt law is the first structural step toward funding deficits in the market rather than by drawing down reserves.
Outlook: With the borrowing framework now in place, the near-term question is how Kuwait uses it, and whether the government follows with the revenue and spending reforms the agencies want to see. The ratings give it room to fund deficits cheaply for years; the longer-term path depends on diversifying income away from oil, the same challenge facing its Gulf neighbours.
Sources: S&P Global Ratings; Fitch Ratings; Moody’s; Kuwait Ministry of Finance; Reuters.
