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 inme 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 13 2016 - Saudi Arabia to work on reducing emissionsMENAFN
(MENAFN) Saudi Arabia realizes the importance of renewable energy in the economic and social growth, and all people have the right to have reliable energy sources.Additionally, the fossil fuel will ...

 Feb 13 2016 - Germany to offer USD 566mn in credits to IraqMENAFN
(MENAFN) Germany will offer USD 566mn worth of credit to Iraq in order to help it with the sharp downturn in global oil prices and its will do it best.Furthermore, Germany will stabilize Iraq with ...

 Feb 13 2016 - Qatar's consumption will grow to 39.6 percentMENAFN
(MENAFN) Qatar's investments of its GDP increased to 39.6 percent in Q2 last year from 32.4 percent in 2014 on stable government capital spending.Moreover, the nation's consumption grew to 20.8 ...

 Feb 13 2016 - Suspected jihadist will not recover Swiss passportThe Journal Of Turkish Weekly
(MENAFN - The Journal Of Turkish Weekly) The Swiss Federal Criminal Court has upheld the decision of the Swiss Attorney General’s Office to confiscate the Swiss passport and identifying ...

 Feb 13 2016 - Turkey praises planned Syria cessation of hostilitiesThe Journal Of Turkish Weekly
(MENAFN - The Journal Of Turkish Weekly) Turkey has praised an agreement between major powers to cease hostilities in Syria to provide humanitarian aid as “an important step” toward ...

 Feb 13 2016 - Split over PYD continues between US TurkeyThe Journal Of Turkish Weekly
(MENAFN - The Journal Of Turkish Weekly) The split betweenAnkaraand Washington over the designation of the Syrian Kurdish Democratic Union Party (PYD) continues to rumble on though U.S. Secretary of ...

 Feb 13 2016 - Turkey to provide 1.5 million in health aid to GazaThe Journal Of Turkish Weekly
(MENAFN - The Journal Of Turkish Weekly) Turkey has said it has transferred $1.5 million to the WHO’s Palestine Representation in order to assist health institutions in Gaza. The announcement ...

 Feb 12 2016 - Turkey Iran to boost dialogue says diplomatThe Journal Of Turkish Weekly
(MENAFN - The Journal Of Turkish Weekly) Turkey and Iran have agreed to continue “enhancing dialogue” a Foreign Ministry official told Anadolu Agency on Friday. Umit Yalcin's remarks ...

 Feb 12 2016 - Turkish FM: Russian airstrikes rule out Syria cease fireThe Journal Of Turkish Weekly
(MENAFN - The Journal Of Turkish Weekly) Foreign Minister Mevlut Cavusoglu on Friday said peace could not be maintained in Syria unless Russia halts its airstrikes. Speaking to the media ahead of ...

 Feb 12 2016 - CIA: Islamic State has chemical weaponsThe Journal Of Turkish Weekly
(MENAFN - The Journal Of Turkish Weekly) The director of the Central Intelligence Agency said Islamic State fighters in Syria have used chemical weapons. John Brennan said there are a number of ...

more...


 






Google

Click to Apply

 
 

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