Quotes: MENA   Enter Symbol: NewsLetter: Search: advanced

Kuwait warns deficit 'inevitable' as spending soars  Join our daily free Newsletter

MENAFN - AFP - 20/05/2014
No. of Ratings : 0
Add to Mixx!



(MENAFN - AFP) Kuwait's finance minister warned Tuesday that the oil-rich Gulf state will face a certain budget deficit because growth in spending has outpaced a rise in public revenues.

"A budget deficit is inevitable... as the average annual growth in public spending was 20.4 percent during the past decade against a 16.2 percent average rise in revenues," mostly from oil, Anas al-Saleh told a special debate in parliament on government policy to diversify income sources.

"This is not only the view of the government but also that of the International Monetary Fund, the World Bank and other institutions," the minister said.

Finance ministry undersecretary Khalifa Hamada explained spending had soared mainly because of a sharp rise in public wages and subsidies on services and commodities. Dependence on oil income also increased.

Between 2005 and 2013, government wages increased from 11.4 billion (8.3 billion euros) to 33.8 billion, a massive 25 percent annually on average, he said.

Subsidies also rose more than fourfold, from 4.1 billion to 18 billion during the same period, an annual growth rate of 23 percent, Hamada said.

At the same time, oil income share in public revenues grew from just 85 percent in 2001 to as high as 95 percent in 2013, boosting Kuwait's heavy dependence on oil, the official said.

Oil income rose from 45.9 billion in 2005 to 106 billion last year.

Hamada said if oil prices remain at the level of around 100 a barrel, Kuwait will post its first budget deficit estimated at 2.3 billion in 2017/2018 fiscal year. By 2035, the country is estimated to accumulate deficits worth as high as 633 billion.

The scenario will be much worse if the oil price drops, he said.

Hamada insisted it was impossible for the state to sustain growth in wages and continue subsidies, urging major cuts.

Earlier this month, the IMF warned Kuwait to contain a rapid rise in public wages and subsidies to safeguard the economy against oil price shocks.

The IMF said general subsidies, particularly on electricity and fuel, constitute a massive 7.0 percent of GDP and as high as a quarter of spending, which was around 70 billion last fiscal year.

Kuwait has boasted a budget surplus in each of the past 14 fiscal years, helping to increase its sovereign wealth fund to over 500 billion, local media said.


 


AFP




  MENA News Headlines
 Feb 1 2015 - HMG wins Excellence Prize for patient care from Arab HealthArab News
(MENAFN - Arab News) Dr. Sulaiman Al-Habib Medical Group (HMG) continues its noticeable attendance in the Arab Health Exhibition in Dubai this year as it has been rewarded with the Excellence Prize ...

 Feb 1 2015 - How to get a job done for 5 onlyArab News
(MENAFN - Arab News) It sounds like a crazy idea but you can actually get a brand new logo for your company or get 250 words translated or 1500 words proofread or your personal piano player for just ...

 Feb 1 2015 - Etihad Airways appoints first female Emirati airport managerArab News
(MENAFN - Arab News) Etihad Airways the national airline of the UAE has appointed Fatima Al-Kharousi as the first Emirati female airport manager. Based in Nagoya Japan she will be responsible for ...

 Feb 1 2015 - Saudi- Facebook beats forecasts with strong profit gainsArab News
(MENAFN - Arab News) SAN FRANCISCO: Facebook said that profit soared on the wings of mobile ad revenue but stressed it is more concerned with investing in the future than making quick cash.While ...

 Feb 1 2015 - Facebook beats forecasts with strong profit gainsArab News
(MENAFN - Arab News) SAN FRANCISCO: Facebook said that profit soared on the wings of mobile ad revenue but stressed it is more concerned with investing in the future than making quick cash.While ...

 Feb 1 2015 - Israeli occupation forces Arrest 10 Palestinian in West BankQatar News Agency
(MENAFN - QNA) Israeli occupation forces arrested since dawn today10 Palestinians in the West Bank amid heavy gunfire during incursions into the West Bank cities of Hebron, Bethlehem and ...

 Feb 1 2015 - 'Qatar Green Building Conference' to Take Place in Doha in AprilQatar News Agency
(MENAFN - QNA) Qatar Green Building Council (QGBC), a member of Qatar Foundation for Education, Science and Community Development (QF), has announced its upcoming inaugural annual conference. The ...

 Feb 1 2015 - Jordanian Government Condemns Execution of Japanese HostageQatar News Agency
(MENAFN - QNA) The Jordanian government strongly condemned on Sunday Daash killing of Japanese hostage journalist Kenji Goto. Jordanian Minister of Information Affairs and Government Spokesman Dr. ...

 Feb 1 2015 - Qatar Armed Forces General Command Issues Precautionary WarningQatar News Agency
(MENAFN - QNA) Qatar Armed Forces General Command forces has announced that the marine shooting range (O.B.D-28), located east of Mesaieed near Fasht Al-Hadid, will be active during the period from ...

 Feb 1 2015 - Qatar Computing Research Institute, Boeing to Host MLDAS 2015 in MarchQatar News Agency
(MENAFN - QNA) Building on the overwhelming success of last year's inaugural symposium, Qatar Computing Research Institute (QCRI) and Boeing are once again partnering to host the second edition of ...

more...


 






Google

 
 

Middle East North Africa - Financial Network

MENAFN News Market Data Countries Tools Section  
 

Middle East North Africa - Financial Network
Arabic MENAFN

Main News
News By Industry
News By Country

Islamic Finance News
Private Equity News

How-To Guides
Technology Section

Travel Section

Search News

Market Indices
Quotes & Charts

Global Indices
Arab Indices

Commodoties

Oil & Energy

Currencies Cross Rates
Currencies Updates
Currency Converter

USA Stocks
Arab Stocks
 

Algeria 
Bahrain 
Egypt 
Iraq
Jordan 
Kuwait 
Lebanon
Morocco 
Oman 
Palestine
Qatar 
Saudi Arabia 
Syria
Tunisia 
UAE 
Yemen

Weather
Economic Calendar
Financial Glossary


Financial Calculators

RSS Feeds [XML]

Corporate Monitor

Events

Real Estate
Submit Your Property

Arab Research
Buy a Research

Press Releases
Submit your PR

Join Newsletters


 
© 2014 menafn.com All Rights Reserved.  Terms of Service | Privacy Policy | Contact Us | Advertise | About MENAFN | Career Opportunities | Feedback | Help