Kuwait could put up deficit before 2017, says finance minister . . . . . . . . . . Lower OIL PRICES will bring the government’s budget deficit before 2017, Kuwait’s FINANCE minister Anas Al Saleh told the parliament on Sunday. The sharp decline in OIL PRICES will decrease Kuwait’s public revenues by as much as 60%, Al Saleh said, resulting in the first deficit in 16 years. Kuwait is a highly oil-dependent country as it derives 95% of its public revenues from oil income. Falling OIL PRICES however are starting to hamper the government’s ability to accommodate the country with welfare spending as it did when oil prices were steady above $100 per barrel. Al Saleh said spending on subsidies totaled KWD5 billion ($17 billion) in the last fiscal year. To ease the pressure on its treasury, the government has cut subsidies on kerosene, diesel and aviation fuel starting from January 1. The government is also thinking of slashing subsidies on petrol and other utilities yet no steps have been taken to enact such measures yet. The subsidies phase-out has resulted in higher production costs among Kuwaiti businesses, which triggered several local price hikes. The parliament there has been pleading the government to stop the enactment of any more cuts in subsidies or grants to prevent further price hikes. Over the next year, Kuwait is expected to continue spending despite the austerity measures. The government recently announced a five-year developmental plan worth KWD45.5 billion ($155 billion) on development projects and human resource development, which is expected to FINANCE at least 523 projects over the next five years. Kuwait is one of the Gulf countries that have massive fiscal reserves and strong fiscal position, which means they can withstand falling OIL PRICES even though it is the main source of income for a couple of years. #egyptyard
Posted on: Mon, 19 Jan 2015 09:36:44 +0000
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