Oil and investment asset price declines will affect Kuwaiti solvency: Emir

KUWAIT (Reuters) - The decline in oil prices and the value of investment assets since the start of the coronavirus outbreak will have an adverse impact on the “financial solvency” of the state, Emir Sheikh Sabah al-Ahmad al-Sabah said on Saturday.

“Kuwait is facing the big and unprecedented challenge of shielding our economy from the external shocks caused by this virus, specifically the decline in oil prices and the value of investments and assets, which will have a negative impact on the financial solvency of the state,” the emir was cited by the state news agency KUNA as saying.

It wasn’t clear if the comment meant that Kuwait could delay the payment of government dues, or whether it was a general statement about the deterioration of the state’s finance as a result of the economic impact of the health crisis.

Moody’s Investors Service has placed Kuwait’s Aa2 long-term issuer rating on review for downgrade, citing the significant decline in government revenue from the collapse in oil prices, and uncertainty that it will be able to access sufficient sources of financing at a time of increased need.

Reporting by Ahmed Hagagy; Writing by Maher Chmaytelli; Editing by Mike Harrison