Kuwait can’t pay salaries beyond October, minister tells Parliament

Kuwait has KD2bn ($6.6bn) worth of liquidity in its Treasury and not enough cash to cover state salaries beyond October, Finance Minister Barak Al-Sheetan said.

The government is withdrawing from the General Reserve Fund at a rate of KD1.7bn a month, meaning liquidity will soon be depleted if oil prices don’t improve and if Kuwait can’t borrow from local and international markets, he told parliament on Wednesday.

The house is discussing a report from parliament’s finance and economic committee in which it rejected draft legislation allowing the government to issue bonds.

Lawmakers are also debating a bill to halt the transfer of 10 per cent of revenue to the Future Generations Fund, designed as a buffer for when Kuwait’s oil reserves run out, in years when the government runs a deficit.

Read more: Kuwait’s $65 Billion Debt Plan in Peril After Draft Law Rejected

The government estimates a budget deficit of KD14bn in the current fiscal year, ending March 31, Al-Sheetan said.

”In the medium to long-term, in the absence of borrowing, more austerity measures will have to be applied to public spending,” the minister said. “In several decades, the FGF will run out, affecting the welfare of citizens and the state.”