Fitch: Future borrowing does not raise debt metrics
Fitch agency explains that the recent amendment to Kuwait's Future Generations Fund law enhances sovereign financing flexibility. The government can borrow from the fund to support reserve funds and meet financial needs without negatively impacting public debt metrics. The agency noted that Kuwait's strong sovereign foreign assets, estimated at 668% of GDP in 2026, ensure the country's ability to absorb pressures resulting from increased debt and spending. Additionally, the amendments, including the financing and liquidity law, expand government financing options and reduce reliance on direct government bond issuance, while maintaining a sovereign rating of "AA-" with a stable outlook. Despite the projected rise in debt to 15% of GDP by 2026, borrowing from the fund is likely to limit the rate of debt accumulation in the coming years.
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