(Bloomberg) -- Kuwait's cabinet instructed state entities to reduce spending by at least 10% in an attempt to cut its budget deficit, state-run Kuwait News Agency reported.
The OPEC member posted a record 10.8 billion dinar ($36 billion) budget deficit in 2020, up 175% from a year earlier. It has been battling to reduce the gap due to its dependence on oil revenues, and high spending on civil servant wages and subsidies.
The measures include:
- Limiting spending on local and international events and exhibitions and travel expenses
- Cutting spending on overseas training, foreign missions and medical treatment for nationals
- Taking steps to ensure debts due to the state are collected
- Revision of incentives to top state officials and rents for state-owned real estate
- Assessment and possible halting of financial incentives to nationals employed in the private sector whose wages exceed 3,000 dinars
- Establishing a sovereign credit rating governance committee
Last month, Kuwait was downgraded by S&P Global Ratings for a second time in less than two years. The rating agency said the downgrade reflects “the persistent lack of a comprehensive funding strategy despite the central government's ongoing sizable deficits.”
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