KUWAIT CITY: Lower oil prices have pushed Kuwait into a rare budget deficit, ending 16 straight years of surpluses for the energy-rich Gulf state, the finance minister said.
The Opec member recorded a budget shortfall of 4.6 billion dinars ($15.3bn) in the fiscal year which ended on March 31, Anas al-Saleh said in a statement carried by the KUNA news agency late Monday.
It was the first shortfall since the fiscal year to March 1999.
Revenues dropped by 45 per cent to $45.2bn while spending was cut by 14.8pc to $60.5bn, the minister said.
Oil income was $40.1bn, a slump of 46.3pc from the previous year, he said.
Oil accounted for 89pc of total revenues, down from 95pc in previous years.
Saleh told parliament last month that Kuwait plans to tap international debt markets through bond issues to finance the deficit.
The finance minister said the emirate would borrow up to $10bn in US-denominated bonds from international markets, in both conventional and (Islamic) sukuk issuance.
The ministry will borrow another $6.6bn in both conventional and Islamic instruments from the domestic market, Saleh said.
In previous years Kuwait built up a sovereign wealth fund worth around $600bn that is invested mostly in the United States, Europe and Asia.
Kuwait is projecting a deficit of $28.9bn in the current fiscal year which began on April 1.
As part of efforts to reduce the shortfall, the cabinet last week decided to raise the price of petrol by up to 83pc, the first increase in almost two decades.
Last year, it raised the prices of diesel and kerosene. It has also decided to lift electricity and water charges on foreign residents.
The ratings agency Moody’s said late Monday that the fuel price reforms will boost Kuwait’s credit ratings because they will lower current expenditures and bolster government finances.