The passage of Kuwait's long-awaited debt law will enable external borrowing to finance the country's deficits and support its economic diversification goals, but this will also increase Kuwait's reliance on debt markets to increase capital expenditure, while risking economic reforms crucial to the country's long-term fiscal sustainability. On March 26, Kuwait passed a new law by decree that allows the country to return to international debt markets and borrow externally for the first time in nearly eight years. The new law permits the Kuwait government to issue up to 30 billion Kuwaiti dinars (approximately $98 billion), or around 60% of its GDP, in debt instruments with up to 50-year maturities. According to the country's finance minister, the law "gives Kuwait greater financial flexibility by providing the option to access both local and global financial markets to enhance liquidity management." It also "supports government efforts to strengthen financial stability and drive...
