KUWAIT: $155 BLN INTO PROJECTS
Kuwait's government on Sunday announced plans to spend $155bn on projects over the next five years despite the current slump of oil prices, the AFP has reported.
The spending will cover 523 projects in a five-year development plan starting in the fiscal year which begins on 1st of April, according to parliament's financial and economic affairs committee secretary, Mohammad Al Jabri.
Oil makes up around 94% of Kuwait's public revenues but thanks to the emirate's significant wealth funds the price slump will not affect projects, the committee heard.
Oil revenues in Kuwait's new budget from April will be calculated on the basis of $45 a barrel, down from $75 a barrel in the current fiscal year, Jabri said.
Kuwaiti oil closed on $43.21 a barrel on Friday, more than a 60% drop since June last year, when prices peaked at $110 a barrel.
The government has vowed to cut current spending, especially subsidies, which account for 85% of total expenditures but promised not to reduce capital spending on projects.
Last month Kuwait scrapped subsidies on diesel, kerosene and aviation fuel.
However, officials warned of a potential budget deficit in the next fiscal year unless oil prices pick up.
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IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.
IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.