A report issued by the Credit Rating Agency "Fitch" showed that taking strict measures against perceived corruption and issuing a new debt law to finance the fiscal deficit will remain at the top of the Kuwaiti government's agenda in the coming months.
"Fitch" expects that the Kuwaiti economy will achieve a moderate recovery in 2021, with growth reaching 3.2 percent, compared to a contraction of 5.5 percent, according to its estimates in 2020. Indicating that private consumption and fixed investment, to some extent, will benefit from the rapid distribution of vaccines, the increase in government spending and the monetary easing policy.
"Fitch" expects higher revenues in the next fiscal year on the back of the significant increase in energy prices, which constitute 89 percent of total fiscal revenues, while it believes that the government will increase major spending in the coming quarters. It also expected the budget deficit to decline from 22 percent of GDP in the fiscal year 2020/2021 to 13.6 percent in 2021/2022.
“Fitch” revealed that the strength of Kuwait's external position will increase thanks to the current account surpluses in 2020 and 2021 adding to foreign exchange reserves despite the drop in oil prices in the first half of 2020.
Source (Al-Arabiya.net, Edited)
