(MENAFN) Kuwait's Finance Ministry said that the country is expected to post a budget deficit before 2017 as the result of the global plunge in oil prices, which will result in slashing the country's public revenues by 60 per cent, leading to a deficit after almost 16 years, Gulf Business reported.
Kuwait, which highly dependent on oil as a means of income, with 95 per cent of its public revenues being derived from it, said that it has spent USD16.96 billion in subsidies during the last fiscal year, adding that due to the current state, it has decided to slash the subsidies on diesel, kerosene and aviation fuel
The reduction in subsidies has also led to production costs soaring among businesses, triggering a wave of price hikes, causing the parliament to urge the government to stop the removal of any more subsidies or grants over fears of further price rise in the economy.
Despite these expectations, Kuwait said that it is not planning to decrease its spending as the OPEC-member recently said that it has allocated USD155 billion in the country's five year developmental plan to spend on various projects and on human resource development, with expectations that the money will finance 523 projects from 2015 to 2020.
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