20200510 kuwait
Kuwait City's skyline. Kuwait emerged as the weakest GCC countries in its support to the private sector in light of the conditions of the Coronavirus pandemic, after offering only additional lending facilities without a financial stimulus plan, said Marzouq Jassem Boodai, Deputy Chairman of City Group, the largest public transport operator and warehousing services provider in Kuwait. Image Credit: iStock

Kuwait City: The Ministry of Finance has approved the distribution of 240.5 million Kuwaiti dinars to 70,000 Kuwaitis following a request submitted by the Public Authority for Manpower last week.

Small business owners and private sector employees will receive support from the government for six months, which includes last month.

90 per cent of the 1.3 million Kuwaitis work in the public sector, while the majority of the private sector employees are expats.

Over the previous years, the government has been trying to incentivize citizens to work in the private sector by providing monthly financial support.

Economic challenges

The drop in oil prices and the increase in government spending during the COVID-19 crisis, have had a significant impact on Kuwait's economy.

Last week, Kuwait’s General Reserve Fund (GRF) lost 1.5 billion Kuwaiti dinars.

In addition, there has been an ongoing discussion over the past few weeks whether the government should use the Future Generation Fund to alleviate the economic impact caused during the pandemic.

The Future Generations Fund, managed by Kuwait Investment Authority (KIA), is the oldest and fourth largest sovereign wealth fund in the world.

By the end of 2020, Kuwait could end up with a 11 per cent deficit, a steep increase from last year’s 4 per cent surplus.