A report issued by the Macroeconomic Department of the Kuwaiti government cabinet warned that the state’s reserves will run out within 4 months only, in case the government continues to withdraw from it, due to the crisis of the budget deficit exacerbation caused by the declining revenues and stoppage of business as a result of the precautionary measures to confront the Coronavirus outbreak and the drop in revenues of oil.
According to the report, the government will face a real liquidity crisis at the beginning of next November, after the collapse of the general reserve, which tumbled to 7 billion dollars during the past few months, while by the end of 2019, it reached about 39.9 billion dollars.
The report indicated that in the absence of an agreement with the National Assembly (Parliament) regarding the mechanism of financing the budget deficit, the Council of Ministers will not be able to pay the salaries of workers in government agencies, and may be forced to liquidate (sell) its assets abroad as one of the options available.
The government had previously announced its intention to stop deducting the share of the future generations fund from the total actual revenues of the budget to provide financial resources, as Kuwait deducts, by law, at least 10% of its revenues annually in favor of the reserve for future generations.
Source (The New Arab Newspaper, Edited)