Kuwait’s trade surplus with Japan rises 53.4%

Kuwait’s trade surplus with Japan surged 53.4 percent year on year in February to $652 million, as exports outpaced imports by a significant margin.

According to the state news agency, overall exports to Japan soared by 34.2 percent in February 2024 to $673 million compared to the same month in the previous year, marking the first increase in two months.

However, imports from Japan to Kuwait amounted to $121 million in February, representing a dip of 14.4 percent compared to the same period in 2023.

Kuwait News Agency reported that Middle East’s trade surplus with Japan also witnessed a rise of 0.4 percent year on year to $5.3 billion in February.

Crude oil, refined products, liquefied natural gas and other natural resources accounted for 96.3 percent of the region’s total exports to Japan, and it went up 1.5 percent in February.

Similarly, the Middle East region’s overall imports from Japan also grew by 4 percent year on year in February, driven by the demand for machinery, manufactured goods and electrical machinery.

The report further pointed out that Japan logged a global trade deficit of $2.5 billion for the second straight month in February, but the amount shrank by 59.2 percent year on year.

China remained Japan’s biggest trade partner in February, followed by the US, the report added. Earlier this month, credit rating agency Fitch had affirmed its foreign and local currency sovereign credit ratings for Kuwait at “AA-” with a stable outlook.

According to a press statement, Kuwait’s stable outlook rating was driven by the country’s strong fiscal and external balance sheets. An “AA-” rating from Fitch indicates expectations of very low default risk. It also implies a firm capacity for payment of financial commitments.

Fitch added that the country’s fiscal and external balance sheets remain among the strongest of Fitch-rated sovereigns.

However, the report added that the rating is marginally constrained by Kuwait’s heavy dependence on oil.

“The rating is constrained by Kuwait’s heavy dependence on oil, its generous welfare system and large public sector that could be challenging to sustain in the long term, and a political context that hampers efforts to tackle consistent fiscal and economic rigidities and approve legislation to allow debt issuance and clarify government financing sources,” said Fitch.