Emir of Kuwait eyes spending cut amidst oil crisis
Sheikh Sabah al-Ahmed al-Sabah warned economic measures to reduce spending will have to be taken to protect government finances from further damage
The Emir of Kuwait has urged the country's cabinet and parliament to cut state spending in response to slumping oil prices, warning that any delay could increase the damage to government finances.
Sheikh Sabah al-Ahmed al-Sabah's comments come at a time when economic measures such as cuts in energy and food price subsidies are touted to occur next year.
"Oil prices have caused state income to drop 60%, but public spending has not been cut, causing a state budget deficit which is a burden on our development aspirations," he said.
Sheikh Sabah called for "urgent reform measures" that would include spending reductions and efforts to find non-oil sources of income.
Kuwait posted a budget deficit of $3.6bn (KWD1.1bn) in the five months through 31 August after a payment into the Future Generations Fund, which is part of its sovereign wealth fund, according to Reuters.
That amount is small compared to the country's huge fiscal reserves, and Kuwait is better able to cope with cheap oil than most of the Gulf Arab oil exporters. the report added.
Nevertheless, officials say the plunge of oil prices means the country must go ahead with long-delayed fiscal reforms.
Sheikh Sabah said he did not want Kuwait to run down its Future Generations Fund.
Including this and other assets, the sovereign wealth fund is estimated to be more than $500bn, the report continued.