KUWAIT CITY: Kuwait on Monday approved its budget for the 2018-2019 fiscal year, projecting a huge deficit for the fourth year in a row because of low oil prices.
Next year’s deficit is estimated at $16.7 billion, or 13.5 percent of the OPEC member’s gross domestic product.
Finance Minister Nayef Al-Hajjraf told a press conference the government will withdraw from the state reserve fund and borrow on the domestic and international debt markets to finance the shortfall.
After posting healthy surpluses for 16 successive years, Kuwait has posted a budget deficit in each of the past three years after oil prices began to slide in mid-2014.
Hajjraf said the new budget projects revenues at $50 billion, up 12 percent on last year’s estimates after the oil price rose from $45 to $50 a barrel.
Oil income is estimated at $44.3 billion on a daily production of 2.8 million barrels.
Spending is projected at $66.7 billion, marginally higher than last year, the minister said.
He said government wages and subsidies account for 73 percent of the budget which takes effect on April 1.
It still has to be passed by parliament.
Just 18 percent of spending will go on development projects, Hajjraf said.
He said Kuwait will not impose value-added tax or other taxation without parliamentary approval.
Kuwait cabinet approves budget with huge shortfall
Kuwait cabinet approves budget with huge shortfall
Work suspended on Riyadh’s massive Mukaab megaproject: Reuters
RIYADH: Saudi Arabia has suspended planned construction of a colossal cube-shaped skyscraper at the center of a downtown development in Riyadh while it reassesses the project's financing and feasibility, four people familiar with the matter said.
The Mukaab was planned as a 400-meter by 400-meter metal cube containing a dome with an AI-powered display, the largest on the planet, that visitors could observe from a more than 300-meter-tall ziggurat — or terraced structure —inside it.
Its future is now unclear, with work beyond soil excavation and pilings suspended, three of the people said. Development of the surrounding real estate is set to continue, five people familiar with the plans said.
The sources include people familiar with the project's development and people privy to internal deliberations at the PIF.
Officials from PIF, the Saudi government and the New Murabba project did not respond to Reuters requests for comment.
Real estate consultancy Knight Frank estimated the New Murabba district would cost about $50 billion — roughly equivalent to Jordan’s GDP — with projects commissioned so far valued at around $100 million.
Initial plans for the New Murabba district called for completion by 2030. It is now slated to be completed by 2040.
The development was intended to house 104,000 residential units and add SR180 billion to the Kingdom’s GDP, creating 334,000 direct and indirect jobs by 2030, the government had estimated previously.
(With Reuters)
