KUWAIT CITY: Falling oil prices will slash Kuwait’s public revenues by 60%, Al Saleh said that plummeting oil prices will slash Kuwait’s public revenues by 60 per cent, leading to a deficit after almost 16 years, Kuwait Times reported.Kuwait will most likely post a budget deficit before 2017 due to the falling oil prices, the country’s finance minister Anas-al-Saleh told the parliament.
Al Saleh said that plummeting oil prices will slash Kuwait’s public revenues by 60 per cent, leading to a deficit after almost 16 years, Kuwait Times reported.
The Gulf country is highly dependent on oil as a means of income, with 95 per cent of its public revenues being derived from it.
However, lower oil prices have been affecting the government’s ability to indulge in welfare spending as freely as before when oil ranged above $100 a barrel.
According to Saleh, Kuwait spent up to KD5 billion in subsidies during the last fiscal year, up 25 per cent from KD864 million spent in the fiscal year of 2004.
In order to reduce the strain on its coffers, Kuwait slashed its subsidies on diesel, kerosene and aviation fuel from January 1. It is considering a phase-out of subsidies on petrol and other utilities but no concrete steps have been taken in that direction yet.
The reduction in subsidies has also led to production costs soaring among businesses, triggering a wave of price hikes, local media reported.
As a result, the parliament has urged the government to halt the removal of any more subsidies or grants over fears of further price rises in the economy.
