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Kuwaiti authorities “still unaware of oil plunge impact”: consulting firm

Recent IMF statement revealed downbeat financial figures for the oil-rich Arab nation

A Kuwaiti economic consulting firm said local authorities are still unaware of the ramifications of the slump of oil prices in international markets, describing the measures taken to address the situation as only “cosmetic touch-ups”.

Al-Shall Economic Consultants Company said in a report that the government’s move to increase fuel prices and slash subsidies of aircraft fuel in addition to cutting government-sponsored financial allowances to those seeking treatment abroad are not enough.

The report makes it clear that the main concern that the Kuwaiti government is required to grapple with is not how to finance the state’s budget, but how to address the root of the deficit – whether it would be better to withdraw from the country’s reserves or to pursue local or foreign borrowing.

The report also referred to a recent International Monetary Fund statement on Kuwait, which revealed downbeat financial figures for the oil-rich Arab nation.

The IMF report warns that the status of Kuwait’s public finance is unsustainable and expected a gross budget deficit of KWD23bn or ten per cent of gross domestic product for the years 2015-2020.

In its report, published by Al-Rai newspaper, Al-Shall warns that weak oil prices will continue to place pressure on the labour market and other basic services, calling for more robust approach to fight financial corruption.

(KWD1 = AED12.18, at the time of publishing)