Kuwait ends eight-year debt market absence with $97B borrowing plan
Kuwait has re-entered the global debt markets after an eight-year absence. In March 2025, the government secured approval for a new debt law allowing borrowing of up to 30 billion Kuwaiti dinars ($97 billion) over the next 50 years. The move follows years of political deadlock that blocked previous attempts to establish a long-term borrowing framework.
The country's last international bond issuance took place in March 2017. Since then, efforts to create a permanent borrowing system were repeatedly rejected by the National Assembly. Political fragmentation and gridlock within Kuwait's semi-democratic system stalled progress for nearly a decade.
The breakthrough came in May 2024, when the Emir dissolved the assembly and suspended certain constitutional articles. This step cleared the way for reforms, including the new debt law. The legislation now enables Kuwait to borrow externally, helping it manage oil price fluctuations and fund budget deficits. Kuwait holds strong credit ratings, with Moody's assigning an A1 grade and S&P Global Ratings an AA-. These rankings place it among the more robust emerging market economies. The return to debt markets expands financing choices but does not indicate a shift toward high borrowing levels. The government is also drafting laws to allow sovereign sukuk issuances, both locally and abroad. Regular bond sales would help establish a clearer sovereign yield curve, offering pricing references for domestic banks and businesses.
The new debt law provides Kuwait with greater financial flexibility to address economic challenges. By resuming international borrowing, the country can better absorb shocks from volatile oil prices. A structured issuance programme may also improve market transparency and support local corporate financing.
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