Moody's: Future borrowing boosts Kuwait's resilience
Moody's reported that the law on borrowing from the Future Generations Reserve Fund enhances Kuwait's fiscal resilience and broadens financing options. It allows the government to utilize its savings to address an expected fiscal deficit of around 20% of the current year’s GDP. The maximum annual borrowing could reach 30-40% of the total output, with the possibility of increasing these limits over time due to reinvestment of returns, especially since the fund’s assets are projected to reach approximately 640% of GDP by the end of 2025. The law aims to reduce pressures on public debt and establish a more transparent institutional framework for the relationship between sovereign funds and the state, with clear borrowing ceilings to ensure financial stability amid international challenges.
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