Kuwait Cab­i­net ap­proves bud­get with huge short­fall

Muscat Daily - - BUSINESS -

Kuwait City, Kuwait - Kuwait on Mon­day ap­proved its bud­get for the 2018-2019 fis­cal year, pro­ject­ing a huge deficit for the fourth year in a row be­cause of low oil prices.

Next year’s deficit is es­ti­mated at US$16.7bn, or 13.5 per cent of the OPEC mem­ber’s gross do­mes­tic prod­uct.

Fi­nance Min­is­ter Nayef al Ha­jraf told a press con­fer­ence, the gov­ern­ment will with­draw from the state re­serve fund and bor­row on the do­mes­tic and in­ter­na­tional debt mar­kets to fi­nance the short­fall.

Af­ter post­ing healthy sur­pluses for 16 suc­ces­sive years, Kuwait has posted a bud­get deficit in each of the past three years af­ter oil prices be­gan to slide in mid-2014.

Ha­jraf said the new bud­get projects rev­enues at US$50bn, up 12 per cent on last year’s esti- mates af­ter the oil price rose from US$45 to US$50 a bar­rel.

Oil in­come is es­ti­mated at US$44.3bn on a daily pro­duc­tion of 2.8mn bar­rels.

Spend­ing is pro­jected at US$66.7bn, marginally higher than last year, the min­is­ter said.

He said gov­ern­ment wages and sub­si­dies ac­count for 73 per cent of the bud­get which takes ef­fect on April 1.

It still has to be passed by par­lia­ment.

Just 18 per cent of spend­ing will go on de­vel­op­ment projects, Ha­jraf said.

He said Kuwait will not im­pose value-added tax (VAT) or other tax­a­tion without par­lia­men­tary ap­proval.

But Ha­jraf said the gov­ern­ment may raise charges on pub­lic ser­vices to boost non-oil rev­enues.


Kuwait’s Fi­nance Min­is­ter, Nayef al Ha­jraf speaks dur­ing a con­fer­ence to an­nounce the bud­get for the 2018/2019 fis­cal year in Kuwait City on Mon­day

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