Moody's has given Kuwait a strong credit rating thanks to its strong fiscal position, with estimates showing that KIA's assets exceed 500% of GDP, nearly 20 times the government debt due in 2017. As for the hydrocarbon reserves, The IAEA estimates that it will last 88 years based on current production rates. However, the government continues to rely heavily on these oil revenues, making them vulnerable to volatile oil prices.
The agency has identified the outlook for Kuwait's Aa2 rating at a stable level. Pointing out that the financial challenges arising from the length of the period of decline in oil prices are offset by the high volume of assets owned by Kuwait, along with the decline of the financial equilibrium point of oil price, and the gradual program of financial and economic reform, which should ultimately reduce the exposure on the oil sector.
Some factors may cause the raise of Kuwait's rating even though the rating is high, such as increased diversification of government revenues and economic activity away from the oil sector. In addition, the continued improvement of the institutional framework, particularly in the standards of transparency and government reporting, may be a positive point for the classification.
On the other hand, the agency pointed out that the factors that may lead to the reduction of the classification is the continued decline in oil prices, and any significant deterioration in the financial budget, and indications of a decline in government financial assets. In addition, any deterioration in the institutional capacity sufficient to maintain the current creditworthiness would also be negative.