Kuwait cabinet approves budget with huge deficit

The Kuwaiti government on Monday approved the 2017/2018 budget with a projected huge deficit for the third year running due to the sharp fall in oil prices.

Finance Minister Anas Al-Saleh said the fiscal year's budget which begins on April 1 is projecting a shortfall of 6.6 billion dinars ($21.6 billion).

The deficit is 25 percent less than the projected shortfall in the current 2016/2017 fiscal year estimated at $29 billion, due to an improvement in oil prices.

Revenues are projected at 13.3 billion dinars and spending is estimated at 19.9 billion dinars, the minister told reporters.

The budget becomes official only after the Gulf state's elected parliament approves it.

Oil revenues are projected at $38.4 billion, up 36 percent on the estimated oil income in this year's budget, the minister said.

Despite the sharp slide in oil prices in the past three years, income from oil is still projected to make up 88 percent of Kuwait's total revenues, Saleh said.

After posting healthy surpluses for 16 years in a row, Kuwait posted a budget deficit in 2015/2016 which ended March 31 last year.

In previous years Kuwait built up a sovereign wealth fund worth around $600 billion that is invested mostly in the United States, Europe and Asia.

As part of efforts to reduce the shortfall, the emirate hiked the price of petrol in September and plans to raise electricity and water charges.