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IMF says Kuwait's reliance on oil to fund projects risky
- Kuwait: Thursday, May 09 - 2013 at 01:14
The International Monetary Fund (IMF) has said that Kuwait should sell bonds rather than rely on oil revenue to fund $110bn of projects, so the Gulf country can cushion against a drop in energy prices, Bloomberg has reported. The country is dedicating as much as $18bn from this year's budget for the investment programme after oil revenue grew 44% in the 2011-12 fiscal year. "By going to the debt market the government wouldn't ''need to fully depend on the budget for financing the development plan,'' said IMF mission chief for Kuwait, Ananthakrishnan Prasad. ''The government should start issuing domestic debt,'' Prasad said. ''Apart from helping to develop a sovereign yield curve, it provides a cushion to the budget against oil price shocks, and also equips the central bank with more tools to conduct liquidity management.''
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