KUWAIT CITY, Dec 7: Moody’s said that the credit position of Kuwait and the rating of the government of Kuwait at A1 stable depends on the country’s exceptionally huge financial reserves and huge oil and gas reserves with low production costs and very high income levels, pointing out that these strengths are offset by Kuwait’s very high dependence on oil and exposure to the risks of shifting from long-term carbon and challenging political environment, which impede policy formation and the country’s ability to adapt to regional geopolitical shocks and tensions, reports Al-Qabas daily. In a recent report, it indicated that the stable outlook reflects balanced risks to the rating.

Effective implementation of measures aimed at reducing the government’s dependence on oil revenues and diversifying the economy, which the agency does not currently take into account in its baseline assumptions for at least the next two years, may increase Kuwait’s credit flexibility to fluctuations in oil prices.

Moody’s indicated that Kuwait’s rating may rise if:

■ The prospects for financial and economic diversification away from oil have improved significantly, which will lead to an increase in its assessment of the country’s flexibility in facing the risks of shifting away from carbon in the long term.