Moody’s might lower Kuwait

Moody's Investors Service said it placed Kuwait's Aa2 long-term issuer rating on review for downgrade.

During the review, Moody's will assess the extent of the impact of the further sharp fall in oil prices, which it expects to remain low for several years, on Kuwait's economic performance and the balance sheet of its government in the coming years.

In particular, the review will allow the agency to determine the extent to which Kuwait's economic and fiscal strength insulate it from the need to take a rating action to reflect the impact of the price shock.

Kuwait is highly dependent on hydrocarbons to drive economic growth and to finance government expenditure. Oil and gas accounted for over 90% of total goods exports and roughly 63% of nominal GDP in 2014, the latest date for which full-year official statistics are available. It also provides around 77% of total government revenues.

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