Fitch revises Kuwait view to negative

Fitch Ratings said it revised the outlook on Kuwait to negative from stable and affirmed its issuer default rating at AA.

The revision reflects near-term liquidity risk associated with the imminent depletion of liquid assets in the general reserve fund in the absence of parliamentary authorization for the government to borrow, Fitch said.

“This risk is rooted in political and institutional gridlock that also explains the lack of meaningful reforms to tackle double-digit fiscal deficits and the expected weakening of Kuwait’s fiscal and external balance sheets, although these will remain among the strongest of Fitch-rated sovereigns,” the agency said in a press release.

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