Font Size

- Aa +

Wed 3 Jun 2015 01:48 PM

Font Size

- Aa +

Kuwaiti minister to pay $31m bonuses despite looming budget deficit

Minister of Public Works, Electricity and Water reportedly says 13,000 public sector staff will get pre-Ramadan bonuses

Kuwaiti minister to pay $31m bonuses despite looming budget deficit

A Kuwaiti minister has announced $31m worth of bonuses will be paid to his staff despite the national government facing a budget deficit.

Minister of Public Works, Electricity and Water Ahmad Al Jassar approved the annual payments for about 13,000 employees, Al Anba reported.

The payments are expected before Ramadan.

Kuwait is expected to record its first budget deficit in two decades in 2016 or 2017.

Finance Minister Anas Al Saleh told the Parliament in January the recent decline in oil prices, which account for about 90 percent of export revenues, would see Kuwait fall into the red sooner than the International Monetary Fund (IMF)’s 2017-18 prediction.

The budget is being particularly weighed down by expensive subsidies for petrol, electricity and water, which Al Saleh said had been growing by 25 percent annually.

The total subsidy bill had soared from KD864 million ($2.94 billion) in the 2004-05 fiscal year to almost KD5 billion ($17 billion) during the 2013-14 fiscal year, which ended a few months before the oil price slump.

The Kuwaiti government has typically paid an annual bonus to citizens working in the public sector for years.

Sources have told Arabian Business it would be politically unpalatable for authorities – ultimately ruled by the Emir – to reduce or remove subsidies and bonuses.

For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.