Kuwait posts $18bn deficit for previous fiscal

The Dollar Business Bureau

Kuwait's Finance Minister on Monday said the country has reported a budget deficit of $18.2 billion for the previous financial year as the lower crude prices has given a major hit to the oil-exporting country’s economy.

The acting coal minister Anas al-Saleh said to the state-run Kuwait News Agency that the deficit was nearly $9 billion less than the government had earlier budgeted for. The new financial year in Kuwait began on April 1.

Kuwait's budget deficit signals the negative impact the lower crude prices have had on major oil-exporting economies, in particular the Gulf countries, which heavily rely on oil revenues to support their generous subsidies, public sector wages and welfare benefits.

Al-Saleh said Kuwait is facing serious challenges that require cutting down on the country’s overall spending, creating more jobs for Kuwaitis, diversifying the economy and attracting greater foreign investment.

Last month, the World Bank had lowered Kuwait’s economic growth forecast, along with that of other Gulf economies such as Bahrain, Kuwait, Oman, Qatar and Saudi Arabia, for the fiscal 2016-17 due to lower crude prices.

Washington-based global financial institution had projected 1.3% growth for Kuwait, 1.6% for Oman and 2.2 % for Bahrain.