The Kuwaiti government will discuss proposed amendments to a long-debated debt law, including reducing the oil-exporting nation’s debt ceiling, Finance Minister Barak Ali Al-Shitan told parliament on Sunday.
The government and parliament have long been at odds over the law that would allow Kuwait to tap international debt, but the issue has gained urgency in recent months due to the COVID-19 pandemic and low crude prices.
The law proposed by the government would allow it to borrow a maximum of 20 billion dinars ($65.53 billion) over 30 years, 8 billion of which would be used to cover this year’s budget deficit.
Al-Shitan said it remained “urgent and necessary” to pass the law. Kuwait faces a deficit of 14 billion dinars this fiscal year, which began on April 1.
Parliament’s financial and economic committee proposed a debt ceiling of 10 billion dinars and for the repayment period to be 10 years, said the committee’s head, Safaa al-Hashem.
She added that the proposal included that the law be reconsidered within three years, in terms of the debt ceiling and repayment period, provided that the next finance minister presents a complete economic reform program with a way to cut expenditure and boost revenue, as well as lay out clear repayment mechanisms.
Al-Shitan told the committee public debt would not exceed 60 percent of gross domestic product and that proceeds would go to infrastructure and development projects, he told reporters after meeting the committee.
He said the government would study the committee’s proposals and return a written response in order to reach a compromise and pass the long-delayed debt law.