Kuwait Wednesday warned it will not be able to pay salaries of civil servants from November for lack of funds amid increase in budget deficit caused in part by slump in oil revenues.
Finance Minister Barak Al-Sheetan rung the alarm bell before the parliament. He said the Gulf country is withdrawing from its General Reserve Fund at a rate of 1.7 billion dinars a month.
Al-Sheetan told the lawmakers that the oil-rich country will need to see to oil price improving or fall back on borrowings from local and international markets.
“In the medium to long-term, in the absence of borrowing, more austerity measures will have to be applied to public spending,” Al-Sheetan said.
Salaries of the public workers and subsidies reportedly account for 76 per cent of the total state spending.
Kuwait’s budget deficit according to the state official increased by 69 per cent to 5.64 billion dinars in the last fiscal year, and the government estimates that it will be more than 14 billion dinars in the current fiscal year, ending on 31 March.
The economy of the Arab country has slowed down because of the crash of oil price on which the state budget has been built, and socio-economic difficulties generated by the covid-19 pandemic.