In March next year, Kuwait is preparing to repay the first tranche of a $ 8 billion loan at a 2.75% interest rate borrowed from an international bank in 2017. The first tranche set for five years is worth $ 3.5 billion, while the second tranche loan of $ 4.5 billion will be paid in 2027.
According to current economic and financial factors, Kuwait has not faced the problem of paying the full amount of the first tranche or loan, or even doubling its value, but the problem is particularly debt repayment. More serious than capacity In the light of the Finance Minister’s pledge to work in parallel with the approval of public debt law. With the support and promotion of credit rating agencies, more recently last week’s Standard & Poor’s, we even believe it will address the issue of the budget lending crisis through debt and even pave the way for what is known as national dialogue. increase. The Debt Law reports Aljarida daily.
An analysis of the $ 8 billion payment aspect Kuwait borrowed in 2017 shows that it was used to raise the current spending of the general budget: (salary-subsidy-bid). You see. This action in dealing with the financial or economic benefits to the state, and the funds obtained from borrowings from banks, is that public debt borrowing continues to fund current spending within the budget. It reinforces concerns that it will be a means, referring to the ability to direct borrowed funds to capital projects that achieve economic and financial processing such as tax filings for public funds, such as employment opportunities for young people in Kuwait. The economic benefits from that.
Perhaps the source of the repayment of the first tranche funds in the 2017 Kuwait International Loan indicates that the loan amount was used without economic or financial gain. Repayments are made through the return of Kuwait Investment Authority investments such as bank deposits, bonds and sukuk interest, or the return of stocks, funds and foreign real estate. Therefore, we predict two things like this. First, the borrowed funds did not achieve the return to raise funds for repayment because they were used in terms of current spending rather than the expected investment. The fund was indirectly affected.
The statement by Finance Minister Abdul Wahab al-Rashid on his “Twitter” account regarding the need to develop an economic plan in parallel with the approval of the bond law does not have many positive intentions and trends. There is no mistake. , But it puts it in front of challenges with various financial and economic trends of the country,
Looking at the latest Standard & Poor’s credit rating report published last week, as a rule, credit ratings are chronic, and perhaps Kuwait’s economic crisis is chronic and requires effective and prompt treatment. As long as it is not necessary to classify from international organizations.
https://www.timeskuwait.com/news/3-5-billion-dollars-to-be-repaid-to-international-banks-next-march-part-of-8-billion-loan/ Part of a $ 3.5 billion, $ 8 billion loan to be repaid to an international bank in March next year