One of World’s Richest Nations Taps Wealth Fund as Cash Dries Up
- Without borrowing, government out of options to cover deficit
- Standoff with parliament has delayed debt law, stymied reform
Kuwaiti MPs attend a parliament session at the national assembly in Kuwait City on Jan. 5.
Photographer: Yasser Al-Zayyat/AFP/Getty Images
Kuwait’s government has transferred the last of its performing assets to the country’s sovereign wealth fund in exchange for cash to plug its budget deficit, after a political dispute over borrowing left one of the world’s richest nations short of cash and prompted Fitch to cut its outlook to negative.
Fitch affirmed Kuwait’s AA rating but said “the imminent depletion of liquid assets” and “absence of parliamentary authorization for the government to borrow” was creating uncertainty. Its report follows S&P Global Ratings’ recent warning that it would consider downgrading Kuwait in the next six to 12 months if politicians fail to overcome the impasse.