![Kuwaiti Prime Minister Sheikh Sabah al-Khaled al-Sabah (L) talks with Kuwait’s Finance Minister Barak al-Shitan, during a parliament session at Kuwait's national assembly in Kuwait City on 12 August 2020. [YASSER AL-ZAYYAT/AFP via Getty Images]](https://static.srpcdigital.com/styles/1037xauto/public/2020/08/21/4.jpg.webp)
Kuwait’s Finance Minister Barak al-Shaitan affirmed that salaries and public subsidy would remain untouched, confirming adequate cash liquidity for paying them.
Shaitan's comments came in response to earlier reports claiming budget deficit and that the available liquidity will only cover salaries until next November.
Addressing the National Assembly on Wednesday, Shaitan called for joint efforts with the government to pass a state vision to redress the budget deficit and provide the required liquidity.
An earlier statement attributed to the minister said that Kuwait has KWD2 billion ($6.6 billion) worth of liquidity in its Treasury and not enough cash to cover state salaries beyond October.
On Wednesday, Kuwait’s National Assembly approved a law to make transfers of state revenue to one of its sovereign wealth funds conditional on budget surpluses, a move which will provide more than $12 billion in much-needed liquidity to the treasury, Reuters reports.
The National Assembly, however, returned a public debt law that would allow the government to borrow KWD20 billion ($65.4 billion) over 30 years to a parliamentary committee for two weeks of further study.
Kuwait automatically transfers 10% of the state’s revenue every year to the Future Generations Fund, one of its sovereign funds, but the law passed by the national assembly on Wednesday will now only allow transfers to the fund when the year’s budget is in surplus.
Meanwhile, it makes available to the government 3.8 billion dinars ($12.5 billion) of accrued money that would have been otherwise transferred to the Future Generations Fund, a parliamentary document seen by Reuters showed.
Minister of Commerce and Industry said the law aims to introduce the concept of restructuring and preventive settlement to preserve viable economic establishments.
Kuwait is undergoing its worst economic crisis ensuing from the COVID-19 outbreak and the decline in oil prices – given that oil is the key source to fund the general budget. Before that, the deficit in Kuwait was expected to reach KWD7.7 billion ($25 billion) for the fiscal year from April 1 to March 31.
