Oil rich Kuwait posts budget deficit after 16 years of surplus

Lower oil prices in global market have caused Kuwait a rare budget deficit, after long standing 16 straight years of surpluses for the energy-rich Gulf state.

The OPEC member witnessed a budget shortfall of 4.6 billion dinars ($15.3 billion) in the fiscal year which ended on March 31, Finance minister Anas al-Saleh said in a statement according to KUNA.

It was the first ever shortfall for Kuwait since the fiscal year to March 1999.

Revenues dropped by 45 percent to $45.2 billion while spending was cut by 14.8 percent to $60.5 billion, the minister said.

Oil income was $40.1 billion, a slump of 46.3 percent from the previous year, he said.

Oil accounted for 89 percent of total revenues, down from 95 percent in previous years.

He told parliament last month that Kuwait is seeking to tap international debt markets through bond issues to finance the deficit.

He further explained the plan to borrow up to $10 billion in US-denominated bonds from international markets, in both conventional and (Islamic) sukuk issuance.

The ministry will borrow another $6.6 billion in both conventional and Islamic instruments from domestic market, Saleh said.

In previous years Kuwait built up an independent wealth fund worth around $600 billion, invested mostly in the United States, Europe and Asia.

Kuwait is expecting a deficit of $28.9 billion in the current fiscal year which began on April 1.