(MENAFN) Kuwait's Central Bank Governor, Mohammad Al Hashel, stated that the government should reduce expenditure and boost investments to enhance economy, reported The Peninsula.
The government's spending on wages and benefits is not sustainable in the long run, moreover, the economy could encounter problems if there is a sharp decline in oil prices.
According to the International Monetary Fund (IMF), the country risks draining its entire oil savings by 2017, in case it carries on with its current spending rate.
Al Hashel said that the government's current monetary policy settings are suitable for the country's economic situation, adding that the government will not dither to execute any adjustments, if needed.
In the fiscal year ended March, Kuwait posted a budget surplus of USD47 billion, as a result of high oil income and less-than-planned spending.
It is worth noting that in 2012, Kuwait's economy could expand between 6.5 percent and 6.6 percent, according to Al Hashel.