The Corona-pandemic affecting all the countries hard, but the economically worst effects it has in the countries, whose economy stands on only a few Supports. This relates to the oil-rich regions of the Persian Gulf in particular. The Emirate of Kuwait, for example, makes this day an unusual experience: the state of debt.

so Far, the liabilities of Kuwait were in a non-significant area. The world Bank, for 2019, with a debt ratio of just 15.2 percent of the gross domestic product. The latter is around 262 billion euros, the debt so in the case of nearly 40 billion euros. But this year, you will rise enormously: The rating Agency Standard & poor's expects a debt ratio of 40 percent on new year's eve. The would – because the GDP is falling – then 104.4 billion euros.

state Fund is not enough

The cause of this fourfold increase is not only in the Corona of a crisis. Although Kuwait had to drive his economy down, but even if that would not be necessary, would plug the small Emirate in big trouble.

Because Kuwait is the country on earth, which is most of the revenue from its Oil-dependent. The Black Gold, according to a new report by the world Bank, around 80 percent of government revenue. While the government sets up one-tenth of that each year into a state Fund to Finance the reconstruction of the economy, but whose savings are not enough in the Corona-crisis. db Oil price WTI 41,76 USD -0,47 (-1,11%) Could OTC

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Kuwait's credit Rating

are to be lowered, Standard & poor's (S&P) most recently, the Outlook for the credit rating of Kuwait from "stable" to "negative" will be lowered. This is the first warning shot, before the credit rating of a country is actually devalued. Currently it is still on the second highest level of AA. The shares of Kuwait, for example, with the neighboring United Arab Emirates and Austria. A Level deeper – in the case of "A" would be to Kuwait on a par with, for example, China, Chile and Bermuda.

As to the Rating, the amount of interest which has to pay a country for bonds, trying to Kuwait this year as many new notes to spend. Two weeks ago the government presented a law, which would apply to allow you, in the course of this year, around 14 billion euros in bonds and refinance in the next 30 years, with a total of about 60 billion euros.

Also neighbouring countries stuck in crisis

But the Plan is encountering opposition. It's less the fact that the Kuwait government would like to borrow, but about the fact that opposition forces to demand more transparency from the state Fund to the GRF. The government should publicly state how much money has and how he uses it – and thus ultimately also why its reserves are not sufficient, and bonds are necessary.

even before the Corona-crisis drop in Oil prices make meanwhile many countries. In addition to Kuwait, the United Arab Emirates and Saudi Arabia are big problems. In the UAE, the economy is expected to break according to S&P this year to 11 percent. In contrast, Dubai comes with a 5.4 percent is still good. In Saudi Arabia, could be levied as a reaction to the Corona-crisis this year for the first Time an income tax.

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Date Of Update: 14 August 2020, 18:27