Fitch ups Kuwait to AA

Fitch Ratings said it upgraded Kuwait's foreign-currency long-term issuer default rating to AA from AA- and affirmed the local-currency long-term issuer default rating at AA. The short-term foreign-currency rating is affirmed at F1+ and country ceiling is upgraded to AA+ from AA.

The outlook is stable.

High oil prices have generated a large revenue windfall, which Kuwait has largely used to strengthen its external balance sheet, Fitch said. Kuwait ran a fiscal surplus of over 40% of GDP in the fiscal year ending in March 2008, the agency added.

The net public external creditor position, which excludes equity holdings on the asset side, is as strong as any sovereign rated by Fitch, including Abu Dhabi (rated AA/F1+ with stable view). Although Abu Dhabi is substantially wealthier in per capita terms, it also is more exposed to contingent liabilities in the wider public sector, Fitch said.

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