Kuwait Holds onto Investment-Grade Rating Despite US-Iran War Fallout
Kuwait has maintained its high-grade sovereign credit rating from Fitch despite ongoing challenges posed by the US-Iran war. The country's strong government finances have helped shield it against the effects of the conflict, which has damaged strategic assets and disrupted logistical conditions.
Fitch kept its AA- rating on Kuwait, citing the government's 'exceptionally strong fiscal and external balance sheets'. This rating is just three notches below the top prime grade, making it investment-grade and easier for the country to access capital markets when needed.
Kuwait's external balance sheet remains 'robust', with sovereign net foreign assets rising to 668% of gross domestic product in 2026. This figure is more than 10 times the AA median and represents a significant portion of the Future Generations Fund managed by the Kuwait Investment Authority.
Fitch acknowledged that the US-Iran conflict poses a risk to Kuwait's creditworthiness, but noted that the country has large buffers to absorb any shocks. The decline in oil production due to strikes is expected to weigh on GDP this year, however, and Fitch expects output to average 2 million barrels per day in fiscal year 2026.