Kuwait emir urges reforms as income drops 60pc

AFP, KUWAIT CITY: Kuwait’s ruler called yesterday on officials in the oil-rich state to seek alternative revenue sources and reduce public expenditure after state income dropped 60 per cent due to a sharp slide in crude prices.
Addressing parliament at the beginning of its new term, Sheikh Sabah al-Ahmad Al-Sabah urged citizens to understand the new measures.
“The decline in global oil prices has caused state revenues to drop by around 60 per cent while spending remained without any reduction leading to a huge deficit,” the emir told lawmakers.
He called for “speedy actions to adopt serious and fair measures to complete economic reforms... and reduce public expenditures.”
“Any delay would only increase the budget deficit and make the cost (of reforms) higher,” the emir said. Oil prices have lost around 60 per cent of their value since June 2014, hitting the coffers of energy-dependent countries like Kuwait.
Oil income accounted for about 94 per cent of Kuwait’s revenues during the past 16 years, when the emirate posted a budget surplus and piled up massive fiscal reserves of around $600 billion (543 billion euros).
The reserves are invested mostly abroad by the country’s sovereign wealth fund.
The International Monetary Fund said in a report last week that under existing conditions, the reserves would be enough to last Kuwait for the next 23 years. But Sheikh Sabah said the government should avoid tapping the sovereign fund to finance the budget shortfall.Based on figures published by the finance ministry, Kuwait’s revenues in the first half of 2015 hit 8.34 billion dinars ($27.6 billion), way below the 15.1 billion dinars of income in the same period of last fiscal year.

Kuwait emir urges reforms as income drops 60pc

AFP, KUWAIT CITY: Kuwaits ruler called yesterday on officials in the oil-rich state to seek alternative revenue sources and reduce public expenditure after state income dropped 60 per cent due to a sharp slide in crude prices. Addressing parliament at the beginning of its new term, Sheikh Sabah al-Ahmad Al-Sabah urged citizens to understand the new measures. The decline in global oil prices has caused state revenues to drop by around 60 per cent while spending remained without any reduction leading to a huge deficit, the emir told lawmakers. He called for speedy actions to adopt serious and fair measures to complete economic reforms... and reduce public expenditures. Any delay would only increase the budget deficit and make the cost (of reforms) higher, the emir said. Oil prices have lost around 60 per cent of their value since June 2014, hitting the coffers of energy-dependent countries like Kuwait. Oil income accounted for about 94 per cent of Kuwaits revenues during the past 16 years, when the emirate posted a budget surplus and piled up massive fiscal reserves of around $600 billion (543 billion euros). The reserves are invested mostly abroad by the countrys sovereign wealth fund. The International Monetary Fund said in a report last week that under existing conditions, the reserves would be enough to last Kuwait for the next 23 years. But Sheikh Sabah said the government should avoid tapping the sovereign fund to finance the budget shortfall.Based on figures published by the finance ministry, Kuwaits revenues in the first half of 2015 hit 8.34 billion dinars ($27.6 billion), way below the 15.1 billion dinars of income in the same period of last fiscal year.