Kuwait Approves Budget with $40 Bln Deficit

Kuwait approved the state budget despite a row at the National Assembly. (Asharq Al-Awsat)
Kuwait approved the state budget despite a row at the National Assembly. (Asharq Al-Awsat)
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Kuwait Approves Budget with $40 Bln Deficit

Kuwait approved the state budget despite a row at the National Assembly. (Asharq Al-Awsat)
Kuwait approved the state budget despite a row at the National Assembly. (Asharq Al-Awsat)

Kuwait’s National Assembly approved Tuesday the government budget for the fiscal year 2021-2022, despite a standoff between members of the parliament.

Speaker Marzouq al-Ghanim said that the budget was passed with a slim majority with 32 MPs out of 63, including 16 ministers in favor and one against, while 30 opposition lawmakers refused to vote.

The budget, proposed by the government in January, projected $76.65 billion in expenditure for the fiscal year that started on April 1, with revenues amounting to $36 billion and a deficit of $40 billion, reported the Kuwait News Agency (KUNA).

The vote came amid heated discussions between the opposition deputies and the government.

The ministers, who are also members of parliament, voted on the budget by standing after members of parliament occupied their seats. They also stood at the entrance to the hall while some deputies rapped on tables in an attempt to disrupt the discussions.

Chaos ensued in the parliament after the vote, and the guards entered the hall to restore order after a fight broke out between the rival MPs.

Ghanim had called for the special session to debate the budget at a time when the nation is trying to boost state finances and support an economy that shrank 9.9 percent in 2020 due to low oil prices and the coronavirus pandemic.

“We have the right to request a special session because all regular sessions have been disrupted,” Ghanim said, referring to opposition tactics.

Opposition lawmakers insist on questioning Prime Minister Sheikh Sabah al-Khalid al-Sabah on the constitutionality of a motion passed in March to postpone any questioning of the premier until the end of 2022, in addition to other issues such as corruption.

Kuwait is currently going through one of the most severe financial crises, as most of the General Reserve Fund has been depleted due to the decline in oil prices and the repercussions of the pandemic.

Finance Minister Khalifa Hamada said after presenting the draft budget that the assets of the Future Generations Fund are growing, but the General Reserve Fund suffers from liquidity challenges.

On Monday, Hamada said that despite the great challenges in the state budget, the executive authority is committed to observing the standard of living of citizens, implementing development projects, stimulating economic growth and supporting the growth of domestic product.

Some 71.6 percent of expenditure is allocated for job support, the minister revealed, while some 15 percent of total spending would go towards development projects, chief among them infrastructure and residential ones.

The draft budget was prepared on the basis of an average oil price of $45 per barrel and a production rate of 2.4 million barrels per day, while the breakeven between expenditures and revenues requires a price of $90 per barrel.



AlUla Conference Amplifies Emerging Economies’ Global Voice

Saudi Finance Minister Mohammed Al-Jadaan (AlUla Conference for Emerging Market Economies)
Saudi Finance Minister Mohammed Al-Jadaan (AlUla Conference for Emerging Market Economies)
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AlUla Conference Amplifies Emerging Economies’ Global Voice

Saudi Finance Minister Mohammed Al-Jadaan (AlUla Conference for Emerging Market Economies)
Saudi Finance Minister Mohammed Al-Jadaan (AlUla Conference for Emerging Market Economies)

The “AlUla Conference for Emerging Market Economies” was held at a crucial time, as the world and the region face significant economic, technological, and geopolitical shifts.

From tariffs that will impact international trade to the resurgence of inflation concerns and the resulting delay in expected interest rate cuts, the strengthening dollar and its effects on emerging markets, to the growing geopolitical conflicts—these and other factors undoubtedly have far-reaching consequences for emerging economies.

The conference, organized by the International Monetary Fund (IMF) and the Saudi Ministry of Finance, “marks an important step towards creating a platform that amplifies the voices of emerging economies on the global stage, allowing them to express their views and needs," said Finance Minister Mohammed Al-Jadaan at the conclusion of the two-day event.

Sources told Asharq Al-Awsat that the conference is expected to have a significant impact on shaping future economic policies in emerging economies.

This was evident through in-depth discussions among finance ministers, central bank governors, policymakers, and leaders from both the public and private sectors in emerging economies, as well as international institutions.

The talks covered a range of topics, from economic growth and financial stability to sustainable development, inflation, debt, and proposed strategies to support growth in these markets.

Saudi Arabia’s hosting of the event underscores its prominent position and leadership role both regionally and globally. It also highlights the Kingdom’s commitment to supporting emerging economies and fostering cooperation among them.

Emerging economies undeniably play a key role in the global economy, driving 65% of global growth.
They continue to record strong growth rates, with the IMF projecting a 4.3% growth in 2025 and 4.2% in 2026, compared to a global economic growth of just 3.3% during the same period.

This translates into higher employment rates and increased consumer spending, positioning these economies as attractive destinations for investors seeking major opportunities.