Kuwait’s finance minister warned in remarks published on Saturday that a recent decline in oil prices might force the Gulf Arab state to cut spending and revise downward its 2009-2014 five-year plan.Kuwait would have to cut spending in its next budget if the price of its crude fell below $60 per barrel, Mustapha Al-Shamali told Al-Rai newspaper.
Asked if the current budget with expenditures of almost 19 billion dinars ($70.71 billion) would be affected by a slide in oil prices, Al-Shamali said: “The estimated budget of 19 billion dinar will not be affected but the new budget could be affected depending on an increase or decrease of oil prices.”
Al-Shamali added that a fall in revenue, almost entirely made up of oil exports, would also mean Kuwait could spend less on its five-year development plan initially estimated at 35 billion dinars, part of efforts to become a regional financial centre.
Kuwait had based the current budget on a conservative oil price forecast of $50 a barrel. State news agency KUNA said Kuwait’s crude oil fell to $59.15 on Thursday, as US oil prices touched a 15-month low before rebounding partly on Friday.
OPEC-member Kuwait, which sits on 10 percent of global oil reserves, posted a 7.55 billion dinars preliminary surplus in the first half of its 2008/09 fiscal year on higher than expected oil revenues. (Reuters)
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