Kuwait faces cuts in budget spending

Kuwait: Kuwait's finance minister warned in remarks published on Saturday that a recent decline in oil prices might force the country to cut spending and revise downward its 2009-2014 five-year plan.

Kuwait would have to cut spending in its next budget if the price of its crude fell below $60 per barrel, Mustapha Al Shamali told Al Rai newspaper.

Asked if the current budget with expenditures of almost 19 billion Kuwaiti dinars (Dh259 billion) would be affected by a slide in oil prices, Shamali said: "The estimated budget of 19 billion dinar will not be affected but the new budget could be affected depending on an increase or decrease of oil prices."

Shamali added that a fall in revenue, almost entirely made up of oil exports, would also mean Kuwait could spend less on its five-year development plan initially estimated at 35 billion dinars.

Kuwait had based the current budget on a conservative oil price forecast of $50 a barrel. State news agency KUNA said Kuwait's crude oil fell to $59.15 on Thursday, as US oil prices touched a 15-month low before rebounding partly on Friday.

Opec-member Kuwait, which sits on 10 per cent of global oil reserves, posted a 7.55 billion dinars preliminary surplus in the first half of its 2008-09 fiscal year.