Kuwait Set to Reenter Global Debt Market After Eight-Year Hiatus

Kuwait is preparing to reenter international debt markets for the first time in eight years, following the approval of a long-awaited public borrowing law designed to ease fiscal pressures and fund critical infrastructure projects.

The Ministry of Finance confirmed that the new legislation grants the government the authority to issue up to 30 billion Kuwaiti dinars ($98 billion) in debt instruments, available in both local and major foreign currencies, with maturities extending up to 50 years. This marks Kuwait’s most extensive legal framework for managing public debt to date.

Restoring Fiscal Flexibility

Since the expiration of its debt law in 2017, Kuwait has been unable to issue sovereign bonds. Despite this, the government has relied on substantial state assets to meet financing needs. However, Fitch Ratings recently indicated that passing the new financing and liquidity law will enhance fiscal flexibility and improve Kuwait’s ability to manage future economic challenges.

Finance Minister and Minister of State for Economic Affairs and Investment, Noura Suleiman Salem Al-Fassam, emphasized the strategic significance of the new law, stating: “This legislation provides Kuwait with greater financial flexibility, allowing access to both local and global financial markets for enhanced liquidity management. It also supports government efforts to strengthen financial stability and drive economic development in alignment with Kuwait Vision 2035.”

The move is expected to stabilize liquidity, lower borrowing costs, and reinforce Kuwait’s debt management framework.

Boosting Financial Market Competitiveness

Faisal Al-Muzaini, director of public debt at the Ministry of Finance, highlighted that the law introduces multiple financial instruments, enabling the state to secure funding through bonds, sukuk, and other market tools.

“Developing the local debt markets enhances Kuwait’s competitiveness as a regional financial hub and provides the government with new financial instruments to manage public finances more effectively,” Al-Muzaini stated.

The law addresses a longstanding challenge in financing major development projects and is also expected to stimulate liquidity and encourage private sector participation in financing activities.

Strengthening Fiscal Sustainability

The Ministry of Finance underscored that the legislative move reflects Kuwait’s commitment to a sustainable fiscal policy, balancing development financing with long-term debt sustainability. The government anticipates that the law will enhance Kuwait’s sovereign credit profile, strengthen financial stability, and ensure liquidity under varying economic conditions.

Kuwait’s budget for the upcoming fiscal year, running from April 1, 2025, to March 31, 2026, forecasts a $22.44 billion deficit, with projected revenues of $59.10 billion against expenditures of $79.54 billion. The new borrowing law is expected to play a crucial role in bridging this fiscal gap while supporting key infrastructure and economic initiatives.

As Kuwait prepares to return to the global debt market, financial experts will closely watch how the country leverages its new borrowing capabilities to drive long-term economic growth and stability.