Kuwait has cut 945 million dinars ($3.09 billion) in expenditure from its budget for the 2020/2021 fiscal year, the head of a parliamentary committee said on Tuesday, adding workers’ rights, benefits and subsidies would not be affected.
The Gulf country is seeking to save money while facing a deficit of 14 billion dinars this fiscal year, which began on April 1, amid the twin shock of the oil price crash and coronavirus pandemic.
For more coronavirus news, visit our dedicated page.
The head of the budgets and final accounts committee, AdnanAbdulsamad, also said, however, that the deficit could be lower as it was based on an oil price of $30 per barrel, which has since somewhat recovered.
For all the latest headlines follow our Google News channel online or via the app
To bolster its finances, the government is trying to pass a debt law that would raise Kuwait’s debt ceiling and allow it to tap international investors. But lawmakers want to see plans to reform the economy and shift its heavy reliance on oil, which made up 89 percent of revenues last fiscal year.
“As a result of the current crisis, the ministry of finance has amended the estimates for the 2020/2021 budget, with revenues estimated at 7.5 billion dinars and expenditures at 21.5 billion dinars,” Abdulsamad said, according to parliament’s Twitter account.
In January, Kuwait expected spending of 22.5 billion dinars and revenues of 14.8 billion dinars in the 2020/2021 budget.
Abdulsamad said surpluses between 1999 and 2019 totaled 50 billion dinars and were transferred to the General Reserve Fund, one of Kuwait’s sovereign funds.
Read more: Kuwait posts budget deficit after 16 years of surplus
But “they were exhausted due to the absence of a prudent approach regarding expenditures,” he said.
In June, Kuwait said it would cut state entities’ budgets by at least 20 percent.
“Lawmakers reaffirmed, during a discussion on budgets, the need to reconsider support for (government) bodies, abolish the futile ones, and restructure state institutions in order to limit the state’s general budget deficit,” the Kuwait National Assembly said on Tuesday via Twitter.
- Kuwait budget deficit could increase to $46 billion in 2020/21: Document
- Coronavirus: Kuwait raises budget of ministries, government agencies by $1.6 bln
- Kuwait approves budget with deficit for sixth year
- Kuwait parliament passes budget with $22 bln shortfall
- Kuwait cabinet approves budget with huge shortfall
- Kuwait posts budget deficit after 16 years of surplus
- Kuwait steps up domestic debt issues to finance budget deficit