In a report released Tuesday (November 15th), the International Monetary Fund (IMF) said Kuwait must enact further subsidy reforms to trim its budget deficit resulting from low oil prices, AFP reported.
Posting its first budget shortfall of $15 billion last fiscal year following 16 years of surpluses, Kuwait has adopted a series of austerity measures raising the prices of fuel, power and water.
The emirate liberalised diesel and kerosene prices last year and recently hiked the cost of petrol, causing a political crisis that led to parliament being dissolved and calls for a snap election .
But even with these measures, Kuwait will need 35 billion dinars ($116 billion) to finance its deficit over the next six years, the IMF said in its report.
In spite of the government reform measures, Kuwait's "fiscal and external accounts have deteriorated markedly", it said. "Further subsidy reform is critical."
The report encouraged "the authorities to move ahead with their plans to further rationalise energy subsidies", estimated at close to $7 billion in last year's budget.
It also called for controls on the wage bill and for raising non-oil revenues.
