Kuwait - Mubasher: The reduction of Kuwait's public spending is “inevitable” in the face of weak oil prices, said Kuwait’s Emir Sheikh Sabah al-Ahmad Al-Sabah.
The sharp drop in oil revenues has resulted in a huge budget deficit and “there is no other option but to take effective measures to deal with it, noted Al-Sabah.
OPEC member Kuwait, which accounts for nearly 7% of the world’s proven crude reserves, has sought to cut spending and boost non-oil revenues in a bid to diversify its economy.
However, the measures, which included raising electricity and fuel prices, triggered a political crisis that led the ruler to dissolve the previous parliament in October and call for snap polls.
Before crude prices began to slide in mid-2014, Kuwait generated about 95% of its income from oil.
But the country’s oil revenues dropped from a massive $97 billion in the 2013-2014 fiscal year to just $40 billion in the last financial year, which ended on March 31, according to finance ministry figures.
Moreover, oil income is projected to slide further to around $35 billion this fiscal year.
In 2015-2016, the OPEC state posted its first budget deficit, of $15 billion, in 16 years. It is projecting a shortfall of $29 billion this year.
