Kuwait to borrow more from international market

KUWAIT CITY: Kuwait will increase its borrowing on international markets to plug a budget deficit resulting from low oil prices, the finance minister said.

The move comes after the Gulf state raised US$ 8 billion (7.5 billion euros) last month in its first international bond issue.

“We will continue to be present in the international (debt) market but in a prudent, rational way,” Finance Minister Anas al-Saleh told reporters at the Kuwait Financial Forum.

“We will use all instruments, including bonds and ( Islamic) sukuks. This will go side by side with enforcing reforms,” he said.

After registering a healthy surplus for 16 consecutive years, the Gulf state posted its first budget shortfall of US$ 15 billion in the 2015-2016 fiscal year following a slump in oil prices.

Kuwait projected a deficit of US$ 29 billion in the 12 months to March 31.

The country is expecting a deficit of some US$ 21.6 billion for the next fiscal year.

On top of its international bond sales, Saleh said the government had raised domestic debt worth 2.2 billion dinars ( US$ 7.2 billion) in 2016-2017.

The government also withdrew unspecified amounts from its reserves, estimated at US$ 600 billion, to meet the budget deficit.

Saleh said the government put forward a bill allowing the state to borrow up to 20 billion dinars ( US$ 65.5 billion) over the next five years.

Like other countries in Gulf, oil-rich Kuwait has seen its main revenue stream hit hard by a prolonged drop in crude prices.

An OPEC member state, it pumps around 2.8 million barrels per day.