Kuwait Deputy PM: Budget Deficit Stems from 60% Decline in Oil Prices

Kuwait's Deputy Prime Minister and Minister of Finance Anas Al Saleh said Saturday the Kuwaiti economy, relying heavily on the oil revenues, suffers a budget deficit as a result from the 60% drop in oil prices in 2014.

    The minister voiced hope that the meeting of the oil ministers of the GCC states and Russia, due in Riyadh, capital of Saudi Arabia on Sunday will lead to ratcheting the prices to USD 50-60 in the coming 15 months, according to Kuwait News Agency (KUNA).

    Higher prices encourage the investors in the oil industry, wither companies or states, to pump more funds to the oil explorations, which, in turn, lead to more supply.

    He noted that the volume of investments in oil explorations and production went down by 26% in 2015 and 2016 due to low prices, expecting the same rate of decline to continue next year.

    While the final account for FY 2014-2015 shows a surplus of KD 3.5 billion, that of FY 2015-2016 shows a real deficit of KD 4.6 billion resulting from the 60% decline in the revenues, he explained.

    He noted that the government raised a document for economic reform, a package of measures for short-term and medium-term economic and financial reforms taking into account the objectives of the national development plan, he said.