Kuwait’s resilience allows public spending boost, says Fitch

4 Sep 15

Kuwait’s significant fiscal buffer protected its economy from the fall in oil prices and has allowed the government to press ahead with increasing public spending, according to an analysis by Fitch Ratings. 

The credit rating agency said an increase in public funds would stimulate private sector growth and consumer spending.

“This is likely to improve operating conditions for the banks, given that implementation of projects in Kuwait has been slow in the past and because public-sector spending tends to boost credit demand across a wide range of sectors, stimulating private sector growth and consumer spending,” Fitch said. 

As such, the agency forecasts Kuwaiti non-oil gross domestic growth of 4.5% in 2015 and expects infrastructure finance and corporate lending to grow at a faster pace as more projects are rolled out over the next year and in the medium term.

“Kuwait’s ability to continue with its spending plans without undermining its sovereign credit profile sets it apart from some neighbouring countries that are also highly dependent on oil revenues.”

  • Judith Ugwumadu
    Judith Ugwumadu

    Judith writes about public finance, public services and economics across Public Finance International and Public Finance. She previously undertook reporting stints at Financial Adviser, Global Security Finance and The Sunday Express.

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