(MENAFN - Arab Times) KUWAIT CITY, Dec 31, (KUNA): Kuwait's economy is ending 2018 with a stable future vision and high credit ranking by top international rating agencies. The rating given by Standard and Poor's (S and P) was (AA/A-1+), while Moody's was (Aa2) and Fitch Group gave Kuwait the (AA) rating.
The ratings came after great effort exerted by the Central Bank of Kuwait (CBK) and the Ministry of Finance in adopting monetary policies to achieve economic stability despite regional and international economic crises in the past four years. Kuwait saw a dramatic drop of 60 percent in outcome in the time period from 2014 until now due to the severe fall of oil prices.
Meanwhile, Kuwait's monetary policies protected its economy against the impact of stopping the use of easing policies issued after the 2008 financial crisis by the world's main economies. These economic powers also started raising interest rates on their currencies.
In the same context, the three agencies noted in their reports on Kuwait that the high rating came from the country's strong local and abroad financial conditions. They added that the average price of Kuwaiti oil barrel for the state budget is estimated at $56, which is the lowest among oil exporting countries rated by Fitch.
Moreover, S & P said Kuwait's foreign governmental assets allow it to stabilize the financial field in the face of the drop in oil prices, the lack of diversity in income and the rise of geopolitical tensions in the region.
Kuwait had faced budget deficit in the past years by withdrawing from the Future Generations Fund. The Ministry of Finance has estimated the deficit rate for the fiscal year 2018/2019 at about KD 6.5 billion ($21.5 billion).
The ministry also revealed that the state's revenues are set to reach about KD 15 billion with spending at about KD 21.5 billion.
The agencies stressed on the need to continue economic reforms and find alternative income sources for the Kuwaiti economy, rather than relying only on oil. They also called for allowing the private sector to take part in contributing the country's economy and turn it into the key performer in the field.
By Fawaz Karami