Fitch affirms Kuwait’s rating at AA-, outlook stable
Assets projected to rise to 601% of GDP this year from an estimated 582% in 2024
Government planning to introduce long-delayed excise tax in fiscal year ending March 2026
Updated 7 sec ago
Nirmal Narayanan
RIYADH: Fitch Ratings has reaffirmed Kuwait’s Long-Term Foreign-Currency Issuer Default Rating at AA-, with a stable outlook due to the country’s strong fiscal position and external financial consistency.
The US-based agency said Kuwait’s external balance sheet remains the strongest of all Fitch-rated sovereigns, with the nation’s net foreign assets projected to rise to 601 percent of the gross domestic product this year from an estimated 582 percent in 2024.
According to Fitch, an AA- ranking indicates expectations of very low credit risk and a strong capacity for payment of financial commitments.
Kuwait’s strong rating aligns with the broader trend in the Middle East region, where countries steadily diversify their economies by reducing their dependence on crude revenues.
In February, Fitch Ratings affirmed Saudi Arabia’s IDR at A+ with a stable outlook, while the UAE was rated AA-.
The Kingdom’s A+ ranking indicates Saudi Arabia’s strong capacity to pay financial commitments while signifying low default risk.
“The recently-appointed government has initiated reforms aimed at reducing reliance on oil revenue, improving government efficiency, and rationalizing spending, capping it at 24.5 billion dinars ($79.53 billion), accounting for about 51 percent of GDP,” said Fitch Ratings.
The report further said that the Kuwaiti government’s introduction of a 15 percent domestic minimum top-up tax on multinational companies came into effect on Jan. 1. It is expected to generate about 0.5 percent of GDP, amounting to 250 million dinars annually, with collections expected to commence by 2027.
The government is also planning to introduce the long-delayed excise tax in the fiscal year ending March 2026.
“Fitch views the pick-up in reform efforts as positive. However, a significant overhaul of generous public wages and welfare spending (79 percent of total expenditure; 40 percent of GDP) is unlikely in the short term, given the state’s deep-rooted generosity toward Kuwaiti citizens and still favorable oil prices,” the analysis added.
The Kuwaiti government is also planning to pass a liquidity/debt law, which will enable the country to raise new debt.
The agency said even without a liquidity law, the government would still be able to meet its financing obligations in the coming years, given the substantial assets at its disposal.
Kuwait’s overall revenue is expected to decline in the financial year 2025 due to oil revenue loss from lower crude prices as OPEC+ continues production cuts to maintain market stability, according to Fitch.
The country’s non-oil revenues are expected to grow modestly in the financial year but fall short of the government’s target of 2.9 billion dinars.
The study further said that the Kuwait government’s debt to GDP rose to 6 percent in FY25 and 9.2 percent in FY26, despite a $4.5 billion Eurobond maturing in March 2027.
The report also outlined some constraints that affected Kuwait’s rating, including the country’s weaker governance than peers, heavy dependence on oil, and its generous welfare system and large public sector, which could result in long-term fiscal pressure.
“Prospects remain unclear for meaningful fiscal adjustment to address long-term challenges and legislation to allow debt issuance and improve fiscal financing flexibility, although there are emerging signs of progress,” said Fitch.
KARACHI: Woman investors in Pakistan are “cautiously” looking at the country’s ongoing talks with the International Monetary Fund (IMF) and will buy more shares in companies listed on the bourse, if the negotiations succeed.
Woman investors in Pakistan’s commercial capital of Karachi hope that Islamabad’s negotiations with the global lender for a review of its $7 billion program would end on a positive note, thus allowing the market sentiments to boost.
The Washington-based lender has sent a team of experts, led by Nathan Porter, to see if the South Asian nation is complying with the conditions it has set under its reforms-oriented extended fund facility (EFF).
A successful review would not only lead to the release of about $1 billion to cash-strapped Pakistan, but also open new avenues for investors who have been buying and selling company shares at the Pakistan Stock Exchange (PSX).
“I will be putting more money into the stock market for sure and I would be advising my clients to do the same,” said Saniya Bilal Doni, a 33-year-old CFA charter holder who has been actively investing in Pakistan’s stocks, real estate and gold markets for the last four years.
The mother of two holds a finance degree from the University of Toronto and prefers to make long-term, dividend-based investments in what she called “well performing” banking, real estate, fertilizers and technology stocks that make her portfolio keep growing. Doni though did not quote any numbers to show how big her investment portfolio is.
Having worked for various asset management funds in Canada and Abu Dhabi after completing her graduation in 2013, Doni now is managing her family’s portfolio as well as advising high net-worth individuals on how they should manage their investment portfolios.
She expects more money to come into Pakistan’s economy as a result of a successful IMF review that would help the stocks market increase more.
“All the stocks should technically go up. Yes, that has an impact because as an economy we are unfortunately dependent on IMF’s funding,” she said.
“I am paying attention to all of that, especially as I, you know, make changes to the portfolio, if any, and also if I advise clients.”
Inflation-hit Pakistan has about 350,000 registered individuals who invest in stocks, according to Najeeb Ahmed Khan Warsi, head of online trading at Foundation Securities Ltd.
This number looks dismal given the fact that Pakistan is the world’s fifth most populous nation, with more than 240 million people. The number of woman investors at 5 percent is even negligible.
Like others, these woman investors are also concerned about the outcome of Pakistan’s talks with the IMF, which usually take a couple of weeks to conclude.
“As an investor I am very cautious at the moment. I am holding on to my stocks. I am holding on to my investments. I am very careful with that,” said Isra Ghous Rasool, a 22-year-old business management student who bought some Shariah-complaint stocks a year and half ago to prove that women too can invest in stocks.
Pakistan’s central bank has almost halved the interest rates to 12 percent since June last year and made the booming stocks market an attractive place for investors like Doni and Rasool. The stock gauge KSE-100 Index almost doubled last year and gained 87 percent in US dollars terms to make Pakistan one of the world’s best performing markets.
Women like Doni and Rasool think that being investors makes them financially independent and empowered enough to have more control over their finances and choices without depending on their male relatives.
“I have a better relationship with money. I am able to dictate what I want in life and be able to actually pay for it,” said Doni, who sees another rate cut coming on March 10 when Pakistan’s central bank is scheduled to revise the borrowing rate.
“I am definitely looking for more opportunities in the stock market.”
Doni thinks investments help people hedge inflation which though now has eased to a single digit, but was seen peaking to 38 percent in May 2023.
Despite such good examples, Pakistan remains a male-dominated society where women tend to stay away from financial markets and use traditional saving methods like running committees.
Maham Alavi, a 40-year-old Pakistani brand manager, is running an all-women group of investors on Facebook from the Saudi capital Riyadh for the past decade.
Her Facebook group, Women Investment Forum, has now expanded to 15,000 members, about half of them being confident investors or analysts working in different fields in and outside Pakistan.
Alavi herself vets all the Facebook profiles to avoid an online scam.
“I started this group in Sep 2016 with the intent to learn myself and gather as many women as I could because the PSX had always been a male-dominated field in Pakistan,” she told Arab News from Riyadh.
Women Investment Forum is an educational group and does not tell its members where to invest or what to buy.
“That is their decision to make. We try to empower them so they can make decisions themselves,” said Alavi, a mother of two.
Pakistan’s stock exchange also organizes workshops and awareness sessions to promote financial literacy among women that makes them financially independent. One such event is being organized by the PSX on March 10 in Karachi to celebrate the International Women’s Day.
Both Doni and Rasool are equally critical of the prevailing political uncertainty in the country that by and large keeps investor sentiments dampened in Pakistan.
Pakistan is facing a political crisis since April 2022, when prime minister Imran Khan was ousted from power through a parliamentary no-trust vote. Khan remains in jail and his Pakistan Tehreek-e-Insaf party keeps agitating on roads across Pakistan demanding the release of its political prisoners, including Khan.
“Political noise does play a huge role and whenever I’m trying to, you know, encourage, overseas Pakistanis to invest into Pakistani stock market or, you know, real estate, this is their number one concern,” said Doni, while sitting in her home office in Karachi’s Clifton area.
Rasool said political uncertainty has a huge impact on stock fundamentals. Recalling how the stock market had reacted to the arrest of Khan, she said a lot of stocks were oversold and a lot of investors had opted for selling their holdings in panic.
In their Women’s Day message, Alavi, Doni and Rasool said women, who make up half of Pakistan’s total population, should at least start learning about making investments in stocks for long-term gains.
“The IMF guys are right now in the country, so things are on the upward trajectory. If you’re still on the fence, on the sidelines, at least equip yourself with the right knowledge,” Doni urged.
RIYADH: Saudi Aramco has lowered its crude oil prices for Asian buyers in April, marking the first reduction in three months. This price cut aligns with market expectations and follows the decision by OPEC+ to gradually increase oil supply starting this month.
According to an official statement, the official selling price for the benchmark Arab Light crude has been reduced by 40 cents, now standing at $3.50 per barrel above the average price of Oman and Dubai crude.
This change comes after the OSP for Arab Light hit a 12-month high last month, reaching $3.90 above the Oman and Dubai average.
Other grades of Saudi crude also experienced price cuts. The OSP for Arab Extra Light has been lowered to $3.30 per barrel, while Arab Super Light is priced at $4.05 per barrel. Additionally, the price for Arab Medium crude has been reduced to $2.95 per barrel, and Arab Heavy crude now stands at $1.80 per barrel.
For North American buyers, Saudi Aramco set the OSP for Arab Light crude at $3.80 per barrel above the Argus Sour Crude Index for March.
This price adjustment follows OPEC+’s decision to proceed with a planned increase in oil output by 138,000 barrels per day starting in April. It marks the group’s first production increase since 2022. Meanwhile, Russian and Iranian oil exports to China are on the rise, as non-sanctioned tankers take advantage of attractive payoffs, helping to ease supply concerns.
Saudi Aramco’s crude oil is classified into five grades based on density: Super Light (greater than 40), Arab Extra Light (36-40), Arab Light (32-36), Arab Medium (29-32), and Arab Heavy (below 29). These price changes influence the cost of approximately 9 million barrels per day of crude oil shipped to Asia, setting price benchmarks for other major oil producers such as Iran, Kuwait, and Iraq.
Aramco typically announces its crude OSPs around the 5th of each month, setting the tone for the global oil market.
Saudi e-commerce sales soar 45% in January, surpassing $5.5bn
Transaction volumes jumped 33.65% to 111.42 million
Spending on miscellaneous goods and services made up 12%, or SR7.07 billion
Updated 09 March 2025
Dayan Abou Tine
RIYADH: Saudi Arabia’s e-commerce sales using Mada cards surged 44.64 percent yearly in January, reaching SR20.87 billion ($5.56 billion), underscoring the Kingdom’s accelerating shift toward digital payments.
Data from the Saudi Central Bank, or SAMA, showed transaction volumes jumped 33.65 percent to 111.42 million, reflecting rising consumer spending and the growing adoption of contactless payment technologies. The figures cover online shopping, in-app purchases, and e-wallet transactions, excluding credit card payments via Visa or MasterCard.
Mada, Saudi Arabia’s national electronic payment network, offers debit and prepaid card services. Utilizing near-field communication technology for contactless payments, it ensures secure transactions at physical retail locations and online.
Mada sales are rising due to the Kingdom’s increasing spending power and widespread adoption of NFC-enabled devices. Dual-income households and a strengthening economy have boosted consumer purchasing, while user-friendly digital payment solutions such as Mada are accelerating the shift toward a cashless society.
E-commerce transactions have also seen significant growth, driven by post-pandemic digital adoption and substantial investments in online platforms, allowing the Kingdom’s payment landscape to evolve rapidly, with Mada cards now accounting for most card transactions.
While Mada continues to drive e-commerce expansion, the broader point-of-sale landscape reveals an even more dynamic trend.
At physical retail outlets, customers have access to several payment options, including Mada, which drove January sales to SR58.21 billion — an 8.19 percent year-on-year increase — while the number of transactions rose 13.10 percent annually.
Data from SAMA showed that spending at restaurants and cafes, as well as beverage and food outlets, accounted for the highest shares, roughly 30 percent in total, amounting to around SR8.7 billion each.
Spending on miscellaneous goods and services, including personal care, supplies, and maintenance made up 12 percent, or SR7.07 billion.
Jewelry sales recorded the highest growth among point-of-sale categories, surging 24.71 percent year on year in January to reach SR1.19 billion. Clothing and footwear spending grew about 14 percent, totaling SR3.68 billion.
The spike could be partly attributed to the new year, when consumers, bolstered by year-end bonuses and festive promotions, tend to refresh their wardrobes and accessories. Retailers further stimulate this trend by launching clearance sales and special offers, likely driving increased spending during January.
The widespread adoption of NFC-enabled devices, mobile payment apps, and integrated digital wallets has significantly streamlined transactions in-store and online.
Backed by modern payment processing systems and a supportive regulatory framework, these technologies are driving higher transaction volumes and enhancing consumer convenience.
KARACHI: China has rolled over a $2 billion loan to Pakistan for one year, the adviser to the finance minister of Pakistan confirmed on Saturday amid Islamabad attempts to strengthen its financial reserves.
The development takes place as an International Monetary Fund (IMF) delegation is in Islamabad to conduct its first review of the $7 billion loan agreement reached between the two sides last year. The IMF delegation will assess the government’s performance in meeting key conditions of the loan. A successful review would secure the release of an additional $1 billion for Pakistan.
Debt rollover commitments from Pakistan’s allies and regional partners China, Saudi Arabia and UAE were instrumental in helping Islamabad secure the bailout program last year to keep its fragile economy afloat.
“Yes, it is confirmed that China has made this rollover,” Khurram Schehzad, the adviser to the finance minister, told Arab News on the phone. He confirmed the amount of the rollover was $2 billion and it had been extended for one year.
Pakistan needs to repay over $22 billion in external debt in fiscal year 2025, including nearly $13 billion in bilateral deposits, Fitch said.
Pakistan’s Finance Minister Muhammad Aurangzeb has repeatedly said the country aims to escape its prolonged macroeconomic crisis by boosting exports, undertaking long-term financial reforms and ensuring economic growth led by the private sector.
As per its deal with the IMF, Pakistan has agreed to undertake reforms in its energy sector, widen the tax net and privatize loss-making state-owned enterprises.
Pakistan was able to build some trust with the IMF by completing a short-term nine-month program last year. Previous loan programs in Pakistan ended prematurely or saw delays after the governments at the time faltered when it came to meeting key conditions.
Saudi Arabia’s labor market booms as world wakes up to its potential
Kingdom set to achieve its ambitious Vision 2030 objectives and create a dynamic, diversified workforce
Updated 09 March 2025
Nadin Hassan
RIYADH: From advanced technology to bustling tourism, Saudi Arabia is witnessing a labor market transformation that is reducing its reliance on oil and creating jobs in construction, green energy, and beyond.
Government initiatives such as the Saudi Nationalization Scheme and Nitaqat initiative have played a pivotal role in shaping the labor market landscape.
These policies have encouraged private sector employers to hire more of the Kingdom’s nationals across various industries, leading to a significant reduction in unemployment rates.
The commitment to enhancing workforce participation has also contributed to a more inclusive job market, while a strategic focus on developing a knowledge-based economy has led to increased investments in education and vocational training programs.
These initiatives are equipping the local workforce with the skills required to thrive in sectors such as advanced manufacturing, healthcare, and financial services, further accelerating employment growth.
Construction boom fuels job creation
The construction and infrastructure sector has experienced exponential growth in recent years, underpinning the Kingdom’s economic expansion, with contract awards in 2024 reaching $146.8 billion, a record high as it overtook 2023’s figure of $118.7 billion, according to Kamco Invest’s GCC Projects Market Update.
The report added that Saudi Arabia accounted for over 53.8 percent of total project awards across the Gulf Cooperation Council in 2024.
Sachin Kerur, managing partner of Middle East at Reed Smith, told Arab News that this boom is leading to a rise in the opportunities for project managers, designers, architects and many other construction professionals.
“Anyone studying Vision 2030 or visiting the important cities of the Kingdom will be very aware of the construction of large-scale housing, rail and road networks, new airports, infrastructure for major sporting events and industrial production plants,” Kerur said. Tourism-related construction has also seen a surge, with new hotels and resorts hiring more Saudi nationals. “Anyone visiting the Kingdom’s hotels of late will have noticed the number of Saudi nationals employed,” Kerur added.
Major projects such as the Rua Al-Madinah and Qiddiya are further fueling demand for skilled labor in the sector.
The Kingdom’s push to attract foreign investment has not only created job opportunities but also fostered knowledge transfer and skill development among the local workforce. (Shutterstock)
Tourism as a booster
The tourism sector continues to play a pivotal role in shaping Saudi Arabia’s labor market, and is only set to grow as the Kingdom pushes ahead with its aim to attract 150 million visitors annually by 2030. As a result, the demand for hospitality, transportation, and cultural service jobs is rapidly increasing.
“With millions of visitors anticipated to visit Saudi each year, tourism has one of the fastest growing and elastic demand for employment,” Kerur said.
From religious tourism initiatives in Makkah and Madinah to entertainment-driven projects such as the Red Sea Project, the sector’s expansion is creating thousands of jobs for Saudis.
Technology and green energy sectors see expansion
On a tech front, Saudi Arabia’s technology sector is experiencing unprecedented growth, driven by the government’s investments and incentives for global tech firms.
“Foreign investments are driving significant job creation in Saudi Arabia’s emerging industries, particularly technology and innovation, aligning with Vision 2030’s goals of economic diversification and private sector growth,” said Faisal Al-Sarraj, Saudi Arabia’s deputy country senior partner at PwC Middle East.
He continued: “PIF’s focus on technology and innovation has bolstered local employment, particularly in AI, digital transformation, and data analytics. Its support for startups and partnerships with global tech firms is strengthening local expertise.”
Initiatives such as the $100 billion AI and data analytics initiative, known as Project Transcendence, as well as smart city projects including NEOM, are fostering high-skilled employment in advanced fields.
Foreign investments are driving significant job creation in Saudi Arabia’s emerging industries.
Faisal Al-Sarraj, Saudi Arabia’s deputy country senior partner at PwC Middle East.
Citing media outlets Bloomberg and CIO, Al-Sarraj said: “This $100 billion plan positions Saudi Arabia as a global AI and data analytics hub, creating thousands of high-skilled jobs and rivaling regional tech leaders.”
The green energy sector is also taking off in Saudi Arabia, bringing a fresh wave of job opportunities and supporting the Kingdom’s sustainability goals.
Solar and wind farms are being developed across the country, creating thousands of new roles and giving locals the chance to dive into the world of clean energy.
Kerur also cited the life sciences and food industries as other sectors that have seen employment growth.
Saudi welcoming the world
The government’s Saudization initiatives, particularly the Nitaqat program which was established in June 2011, have played a crucial role in increasing the number of nationals in the private sector.
“Many commentators regard Saudization as having been most successful in the retail and tourism and hospitality sectors,” Kerur said.
He continued: “Perhaps less success has been achieved in areas such as life sciences, medicine and design and construction where more skilled resources are needed. That is certainly an area of development for the next few years.”
Moreover, the drive for greater workforce inclusion is also reflected in the increasing focus on supporting female participation in the labor market.
As more opportunities arise in flexible and remote work arrangements, women are stepping into roles across diverse sectors, contributing to the Kingdom’s broader economic transformation goals.
Figures released by the General Authority for Statistics showed that by the end of the third quarter of 2024 the labor force participation rate of Saudi females reached 36.2 percent — well above the original Vision 2030 target of 30 percent, with that goal now upped to 40 percent by the end of the decade.
Kerur added: “Saudi Arabia’s labor market reforms and initiatives are successfully reducing unemployment levels and so much credit must go to Vision 2030 as economic diversification develops at pace. However, this is not merely labour economics.”
He went on to say: “As with other GCC countries like the UAE, there are social and cultural norms that have to be assessed to ensure they are maintained whilst at the same time ensuring unemployment is minimised and the national workforce is equipped for the challenges of the next three decades.”
Regional Headquarters Initiative and FDI
One of the biggest wins for Saudi Arabia in 2024 was the success of its regional headquarters initiative, which has drawn in over 540 multinational companies to set up shop in the Kingdom.
This surge in corporate presence is not just about numbers — it is about turning Saudi Arabia into a thriving business hub, buzzing with new ideas and opportunities.
Companies such as Amazon, Google, PwC, and Deloitte have relocated their regional headquarters, leading to job creation in professional services, consulting, and administrative roles.
“This achievement is having an employment impetus as more and more companies are employing Saudi nationals in line with the Kingdom’s status as a developing business hub,” Kerur said.
The Kingdom’s push to attract foreign investment has not only created job opportunities but also fostered knowledge transfer and skill development among the local workforce.
With multinational firms bringing global best practices and expertise, Saudi nationals are gaining invaluable exposure to international business operations, positioning them competitively in the job market.
Another key initiative was the Golden Visa, which allows foreign nationals to live, work, and own property in the Kingdom without a sponsor,
In order to qualify, applicants must meet specific criteria such as significant investments in real estate or business ventures.
Al-Sarraj said the visa “incentivized” highly skilled professionals and entrepreneurs to relocate to Saudi Arabia, and has expanded employment in sectors such as healthcare, education, and technology, and fostered a knowledge-based economy.
He added: “Reforms like the Labor Reform Initiative improved mobility and flexibility for expatriates, making Saudi Arabia a more attractive job market. This policy also encouraged Saudization, driving the hiring of skilled nationals.”
Challenges and the road ahead
Despite the progress, challenges remain in bridging skill gaps and positioning manual labor or skilled trades as a viable career path for Saudis.
“Education and training will be vital all round for the labor market. Indeed more labor capacity is required to implement Vision 2030 projects and this provides Saudi nationals a significant opportunity to develop blue collar skills,” Kerur said.
He continued: “Of course the private sector, both national and international, will have a key role to play to train, develop and employ nationals. The issue will be the stick or the carrot.”
Kerur further explained that the private sector in Saudi Arabia will require support and assistance, particularly in areas where their capacity to operate or expand is currently limited, and where significant financial investment is needed.
“Saudi Arabia has shown a willingness to enable public private partnership in their labor market and more will be expected in this regard,” he said.
According to Al-Sarraj, one of the key issues is that many workers may not have received the necessary training and or hold the qualifications required by employers.
“Despite significant progress, challenges remain, including skill gaps among the workforce, the need for enhanced educational and vocational training programs, and ensuring sustainable employment opportunities for the growing local population,” he said.
Al-Sarraj added: “Employers often cite skill gaps and higher wage expectations as reasons for not hiring Saudis, highlighting the need for enhanced educational and vocational training programs.”
As Saudi Arabia’s labor market continues to evolve, the combined impact of strategic government initiatives, foreign investment, and workforce development efforts will be key to sustaining momentum.
With significant achievements in 2023 paving the way, the Kingdom is well-positioned to achieve its ambitious Vision 2030 objectives and create a dynamic, diversified workforce that meets future economic demands.
