Oil income had contributed around 95 per cent of public revenues for the nation. But with oil having lost around 60 per cent of its value in the last two years, Kuwait has been forced to launch the sale of its foreign bonds. Photograph: (AFP)
The global oil slump has put pressure on Gulf nations that have projected budget shortfalls worth billions of dollars
In a first for the oil-rich Gulf nation, Kuwait has decided to put foreign bonds worth billions of dollars on sale in the international markets to finance a budget shortfall, a report said on Saturday.
Breaking a 16-year run of surpluses, the emirate recorded a budget deficit of $15 billion last fiscal year resulting from low oil prices. It is projecting a bigger budget shortfall of $29 billion this year.
Oil income had contributed around 95 per cent of public revenues for the nation. But with oil having lost around 60 per cent of its value in the last two years, Kuwait has been forced to launch the sale of its foreign bonds.
Finance minister Anas al-Saleh said Kuwait will issue US dollar-denominated sovereign bonds of up to $9.6 billion during the 2016/2017 fiscal year which ends March 31, Al-Qabas newspaper reported. This comes on top of a $6.6 billion domestic debt programme which is already underway.
Like its Gulf peers, Kuwait has taken some austerity measures that include liberalising prices of diesel and kerosene and hiking petrol prices. Parliament a few months ago approved a law to raise heavily subsidised power and water fees but exempted citizens.
Saudi Arabia, Qatar, Oman and United Arab Emirates have also sold bonds or took syndicated loans to plug their deficits.
(WION with inputs from AFP)