The Kuwaiti government warned in its new work program that the oil-rich country faces an “extraordinary and serious challenge” given the fluctuations in oil prices and its reliance on public finances as the sole source of income.
He told the event, part of which was reported by Reuters, that this challenge threatens the country's ability to provide a decent life for citizens and their basic needs, and its inability to meet local and international obligations. Also put in danger.
Kuwait – which currently relies on oil revenues to finance 90% of its general budget – is trying to diversify its economy and reduce its dependence on oil as almost its sole source of financing.
Previous efforts and plans to diversify the economy met with little success, while other Gulf countries achieved varying degrees of success.
The program states that without economic and financial reforms the expected deficit in the state general budget during the next five years will be between 45 to 60 billion dinars ($146.13 to 194.84 billion).
The Government Action Program also expects government financing needs to double over the next 10 years and the average public budget deficit to reach 13 billion dinars ($42.23 billion) in 2033.
The government said at the event that financing the budget would require higher oil prices of $100 a barrel.
The program warned that a continued deterioration in financial and economic conditions could result in individuals, companies and banks collapsing, the unemployment rate rising “to an alarming extent”, social services collapsing and social security deteriorating.
The document revealed that the government intends to pass laws including liquidity tools, business profits tax and selective tax during the current legislative period.
It also intends to start a feasibility study for a railway link project with Saudi Arabia within 100 days.