KUWAIT: Economic experts have agreed that the progress achieved in financial reform programs, coupled with the clarity of Kuwait’s economic vision, has had a positive impact on assessments issued by leading international financial institutions and credit rating agencies, ranging from the Bretton Woods institutions to global rating agencies and the Financial Action Task Force (FATF).
In separate interviews with Kuwait News Agency (KUNA) on Monday, the experts said these developments have contributed to reshaping the international perception of the Kuwaiti economy — not only as an asset-rich state, but also as one steadily moving toward more efficient and sustainable resource management. They noted that Kuwait is currently transitioning from a phase focused on managing stability to one centered on managing growth, a shift that requires creating sustainable growth engines by empowering the private sector, stimulating quality investment and developing the labor market.
Chairman of the Board of Directors of the Union of Investment Companies, Abdullah Al-Turkait, said the positive indicators issued by international institutions, notably the International Monetary Fund (IMF) and the World Bank, reflect a tangible improvement in the performance of the Kuwaiti economy. He stressed that the national economy is on a path toward gradual recovery and more balanced growth, demonstrating the soundness of current economic policies and the state’s ability to manage challenges.
Al-Turkait pointed out that recent international reports indicate growing confidence in Kuwait’s reform measures and its ability to adapt to regional and global developments, particularly fluctuations in energy markets. He noted that the IMF had projected Kuwait’s return to growth last year, with real GDP growth of 2.6 percent, and further improvement expected this year, driven by stronger economic activity and increased contributions from non-oil sectors.
Similarly, the World Bank projected growth of about 2.2 percent last year and 2.7 percent this year. Al-Turkait said these improvements reflect ongoing reforms aimed at enhancing the investment climate, streamlining procedures and upgrading the legislative and regulatory framework, thereby strengthening long-term competitiveness.
He added that these assessments are based on objective evaluations of several factors, including improved financial stability and the adoption of a balanced monetary policy that supports growth without triggering sharp inflationary pressures. According to IMF estimates, inflation declined to 2.3 percent last year, compared with around 2.9 percent in 2024.
Al-Turkait also noted that Kuwait’s sovereign credit ratings continued to improve and stabilize last year, reflecting the strength of its financial position and external standing. He cited Standard & Poor’s decision last November to raise Kuwait’s sovereign rating to AA- with a stable outlook, attributing it to progress in financial reforms, the enactment of legislation supporting fiscal sustainability — most notably the Finance and Liquidity Law — and efforts to diversify non-oil revenues.
He explained that improved credit ratings translate directly into lower sovereign and corporate borrowing costs, stronger investor confidence and greater attractiveness for foreign direct investment, thereby supporting sustainable growth over the medium and long term. On the domestic front, Al-Turkait said the positive indicators have boosted investor confidence, accelerated development projects, improved the business environment and strengthened the private sector.
Secretary of the Kuwaiti Economic Society, Mohammed Al-Jouaan
He revealed that foreign direct investment inflows to Kuwait rose by 8 percent year-on-year to KD 223 million (about $725 million) during the 2024–2025 fiscal year, reflecting growing foreign interest across multiple sectors following investment-friendly reforms. Secretary of the Kuwait Economic Society, Mohammed Al-Jouaan, said international assessments are based on rigorous quantitative models and detailed analysis of financial, monetary and structural trends, rather than impressions. As such, he said, their positive outlook reflects recognition of Kuwait’s ability to absorb shocks and maintain stability in an increasingly volatile global environment.
Al-Jouaan explained that these indicators have a direct impact on investor behavior, sovereign financing costs and the confidence of international financial institutions. Practically, they enhance Kuwait’s appeal to long-term institutional investors, support fair pricing of sovereign risk and provide policymakers with greater flexibility in economic decision-making.
He identified six key factors behind the improved international perception of Kuwait’s economy: improved fiscal discipline and efficient management of financial surpluses; the strength of the banking sector under an advanced regulatory framework led by the Central Bank of Kuwait; gradual progress in institutional reforms and transparency; stability of monetary policy and the dinar’s peg to a basket of currencies; intensified efforts to combat corruption and reduce public spending waste; and enhanced governance and financial oversight.
He said these combined factors have reshaped Kuwait’s global image as an economy moving toward sustainable and efficient resource management. Looking ahead, Al-Jouaan said continued improvement depends on accelerating structural reforms, diversifying the economic base away from oil, empowering the private sector as a genuine growth engine and transitioning fully to managing sustainable growth.
He added that recent positive assessments by the FATF in combating money laundering and terrorist financing should be viewed as a starting point rather than an endpoint, stressing the importance of addressing technical observations and strengthening implementation. Progress in this area, he said, is closely monitored by credit rating agencies, the World Bank and the IMF when evaluating institutional and financial strength.
Dr Osama Al-Falah, Professor of Economics at Gulf University for Science and Technology
Meanwhile, Professor of Economics at the Gulf University for Science and Technology Dr Osama Al-Falah said international reports are among the most credible tools for evaluating economic performance, as they rely on numerical data and precise technical indicators. He noted that Kuwait’s positive ratings from institutions such as the IMF, the World Bank and global credit rating agencies reflect tangible improvements in the local economy and reinforce confidence among investors and stakeholders.
Al-Falah said these institutions have praised Kuwait’s ability to maintain strong financial surpluses and reserves, stable inflation and renewed growth in non-oil sectors, highlighting the role of skilled national expertise in managing economic affairs. He added that the positive shift in international assessments enhances optimism for a sustainable future based on diversification, innovation and good governance, in line with Kuwait Vision 2035. He concluded that, backed by financial stability, strong institutions and ongoing reforms — including the enactment of the Public Debt Law and improved non-oil sector performance — Kuwait is well positioned to attract high-quality investments and further strengthen its standing as a reliable economic hub. — KUNA
