MENA | Kuwait is struggling to balance a fine fiscal line
In line with trends seen across the GCC, the twin shock of the coronavirus
pandemic and low oil prices has put extra pressure on an already strained
government balance sheet in Kuwait. The budget deficit in 2020 is estimated at almost 29% of GDP, with oil receipts (almost 90% of revenues) plummeting by over 32%.
What you will learn from this report:
- In the short term, the government will struggle to tackle the looming liquidity crisis. For the medium term, a comprehensive set of reforms is needed to tackle fiscal sustainability.
- A political stalemate between government and the elected parliament continues to halt progress on both reform and short-term solutions covering the budget deficit, with delays in fiscal adjustment adding to financing needs and leading to rapid depletion of the General Reserve Fund (GRF).
- Revenues in Kuwait remain heavily dominated by the oil sector, accounting for around 90% of overall revenues in 2019.
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