A report issued by the credit rating agency "Moody's" showed that the exceptionally large assets of the Kuwaiti sovereign wealth fund have absorbed the significant and continuing deterioration in the government's financial position, which has spared the country a very large increase in debt.
According to the agency’s report, “Enhancing global commitment to the carbon transition increases credit risk in the long run,” the speed of carbon transition paths will lead to increased credit challenges if global regulations and policies change, or investors exit the oil and gas sectors faster than expected. The agency indicated that credit pressures will be particularly significant for Iraq, Kuwait and Oman, and in the longer term for Azerbaijan, Qatar, Abu Dhabi and Saudi Arabia.
The agency expected that only Kuwait and Nigeria will witness a significant financial deterioration during the current decade due to the large financial deficits of these two countries already in 2021, despite the high oil prices, and because of their weak ability to adapt. It is likely that Kuwait, Iraq and the Sultanate of Oman will witness the largest financial deterioration during the thirties of this century in the scenario of the announced policies, which mean the policies that have been announced or applied to reach net zero emissions, which is one of the alternative scenarios for the carbon transition over the next thirty years that the International Agency identified for energy.
Source (Al-Rai Kuwaiti Newspaper, Edited)
