To mainly fund $7.6bn projects
Allowed to borrow up to $99bn
2.9% debt-to GDP ratio
Kuwait is on the verge of returning to the debt market after an eight-year absence with plans to borrow up to $20 billion during the 2025-2026 fiscal year, according to local media.
The loans will be used mainly to fund infrastructure projects worth KD2.3 billion ($7.6 billion) included in the current fiscal year, which started on April 1.
The debt law, which was approved by the cabinet and parliament in March, allows the ministry to borrow up to KD30 billion ($99 billion) from local and global markets for a period of 50 years, according to Faisal Al-Muzaini, director of the public debt management department at the ministry of finance.
The debt expected during the 2025-2026 fiscal year ranges between KD3 billion and KD6 billion ($10-20 billion), Al-Muzaini said at a forum organised by the finance ministry in Kuwait City on Monday.
Al-Muzaini said that the debt-to GDP ratio in Kuwait is only 2.9 percent.
“This is a very low level compared with other countries, which the ratio is nearly 60 percent,” he said in comments published in the Al-Qabas newspaper.
“No exact date has yet been set for borrowing in the current fiscal year … but we are now in the final stages of the plan to enter the local and global markets,” he said.
The approval of the “financing and liquidity” law in March after eight years of government-parliament haggling coincides with widening budget deficits in Kuwait due to spending on wages to public servants and subsidies to citizens.
Kuwait’s last foray in the bond markets was in 2017 when it raised about KD2.5 billion ($8 billion) in five and 10-year Eurobonds.
In 2021 Kuwait was reported by local newspapers to have withdrawn nearly 7.5 billion dinars ($25 billion) from the Future Generation Fund to cover a large budget deficit during fiscal year 2021-2022.
