In a significant move, Kuwait’s finance ministry has activated provisions under the Kuwait Public Debt Law to authorize borrowing on behalf of the state. On Sunday, Finance Minister Noura Al-Fassam approved a decision allowing the Central Bank of Kuwait (CBK) and the Kuwait Investment Authority (KIA) to obtain funds from domestic and international markets.
This marks Kuwait’s first return to borrowing since 2017. The decision aligns with the newly enacted public debt law passed in March, which set a borrowing cap of KD 30 billion and a maturity period of up to 50 years.
The CBK is tasked with securing domestic loans in Kuwaiti dinars or convertible foreign currencies. These transactions will adhere to globally accepted financial instruments and standards.
KIA will focus on raising external loans from international markets, also using major convertible currencies. Both institutions must coordinate closely with the finance ministry and submit regular reports on their operations.
This directive, published in the official gazette, follows the Amiri decree-law outlining Kuwait’s public debt strategy. The fiscal year 2025/2026 began on April 1, and the borrowing plan is part of broader efforts to finance key development initiatives.
According to Faisal Al-Muzaini, Director of Public Debt at the finance ministry, Kuwait plans to borrow between KD 3 to 6 billion this year. He stressed that Kuwait’s debt-to-GDP ratio remains exceptionally low at 2.9 percent. In comparison, many countries carry ratios between 60 and 70 percent.
The size of future borrowing will depend on global market conditions, oil prices, and associated financial risks. A five-year borrowing roadmap for 2025–2030 is currently in development.
Finance Ministry Undersecretary Aseel Al-Munaifi noted the Kuwait Public Debt Law will enhance Kuwait’s financial landscape. It is expected to improve investor confidence, strengthen the banking sector, and stimulate economic growth.
Additionally, Al-Munaifi revealed that legislation for sukuk issuance is under final review. Once approved, it will support Kuwait’s efforts to diversify funding sources through Islamic finance instruments.
The implementation of the Kuwait Public Debt Law is viewed as a strategic step to support national development while maintaining financial stability.
