From Figures to Reconstruction: How to Protect the Stock Exchange with Billions in Investment Spending
A preemptive move that fortified the economic system
Ramadan: The capital expenditure surge dispelled deflationary fears and secured the stock market
Al-Hajjari: Five strategic pillars link capital spending growth to the Kuwait Stock Exchange rally
Najeah Bilal
The Ministry of Finance has transformed accounting figures into a developmental shield, protecting the economic system against ongoing geopolitical challenges by raising allocations for construction and infrastructure projects in the (2026/2027) budget draft to KD 3.1 billion, up from KD 2.24 billion in the previous year.
In this context, two experts told "Al-Siyasa" that this proactive financial engineering successfully accelerated the pace of major projects and pumped operational liquidity into the market’s arteries, immediately reflecting in the stability of the Kuwait Stock Exchange as an investment platform insulated from external pressures.
In this regard, former Ministry of Finance advisor and economic expert Mohamed Ramadan stated in a special interview with "Al-Siyasa" that the surge in capital expenditures allocated to construction and infrastructure projects in the (2026/2027) budget draft played a significant role in the resilience of the Kuwait Stock Exchange in the face of geopolitical challenges. He noted that this increase, amounting to approximately KD 860 million compared to last year’s budget, dispelled deflationary fears and laid the foundation for a new phase of structural economic hedging capable of confronting regional disruptions by strengthening the state’s operational assets.
Ramadan mentioned that the Ministry of Finance has indeed succeeded in increasing the volume of capital spending, thereby activating the operational business of listed companies and banks. As the volume of projects grows, companies will be encouraged to borrow from banks, thus setting the economy in motion, which positively impacts the Kuwait Securities Exchange. Moreover, the influx of government capital spending has become an investment safety umbrella, forming a strong financial safety net for the Kuwait Stock Exchange and shielding its transactions from the negative repercussions of ongoing regional conflicts.
For his part, economic expert Ahmed Al-Hajjari stated that accelerating the implementation of major developmental projects represents the first line of defense for monetary stability. He noted that these positive effects reflect on the performance of the Kuwaiti money market through five strategic pillars. The first is consolidating investor and institutional confidence, as the growth in capital expenditure sends strong reassuring signals to local and global financial markets, confirming the national economy’s ability to continue growing and achieving sustainability rates independent of geopolitical pressures.
Regarding the second pillar, he explained that it revolves around injecting cash liquidity, stimulating trading, and the flow of new government contracts and projects, which revitalizes cash movement within the economic arteries. This leads to higher liquidity levels, directly reflected in a noticeable increase in daily circulating liquidity in the trading hall, thereby expanding market depth, activating stock movements, and supporting their market values.
Thirdly, the influx of capital money has maximized the profitability of listed companies, with leading companies listed in infrastructure sectors being the primary beneficiaries of the project boom.
Regarding the fourth pillar, he said it lies in stimulating credit and revitalizing the banking sector. The banking sector represents the heaviest weight and highest relative proportion in Kuwait Stock Exchange indicators. Its effects are reflected through growing demand for financing and an increased pace of credit extended by banks to companies executing government projects, improving asset quality, and raising operational returns for banks, thereby supporting the stability of the general stock market index.
Regarding the fifth axis, he observed that it boils down to attracting foreign capital and investments, as financial stability stemming from government spending enhances the attractiveness of the Kuwaiti market to global funds by offering a safe investment haven. This reinforces the stock exchange’s position as a stable investment destination amid a turbulent regional environment. Furthermore, institutional inflows attract long-term foreign investments targeting leading stocks with guaranteed returns.
