Kuwait plans to forge ahead with infrastructure projects despite the oil price drop and will depend on the private sector to help finance some of these projects, the country’s finance minister and deputy prime minister said yesterday.
“We will continue to spend on infrastructure projects as planned,” said Anas Al Saleh via video at a Meed conference.
“We are focusing more on infrastructure projects which we believe will work the best and we are trying. We want to make sure we don’t fall into the trap of entering economic stagnation because, as you are aware, the Kuwait economy depends on government expenditure.”
Kuwait has about US$150 billion worth of planned but not awarded projects, according to Meed Projects.
Kuwait last year awarded a record $31bn of contracts and was the largest GCC projects market in the first quarter of this year. It is planning a number of projects that will involve the private sector.
Kuwait is projecting a fiscal deficit of 12.2bn dinars (Dh148.44bn) in the fiscal year that starts on April 1, almost 50 per cent higher than the deficit estimated for the current fiscal year, after contributions to the sovereign wealth fund.
“Building our debt management strategy, we of course have everything on the table,” said Mr Al Saleh, who is also the acting oil minister. “We are using reserves that we have had for good years and mixed with issuing some sovereign bonds in local market and also in international markets.”
Kuwait is implementing a number of reforms to cope with an era of low oil prices. Alongside other Arabian Gulf countries, it plans to introduce value added tax by 2018.
The Kuwait cabinet has also approved slapping 10 per cent corporate tax on businesses.
It is also considering removing subsidies on energy.
“We are discussing this with parliament because in order to deal with that it has to be a legislation especially on the electricity side,” said Mr Al Saleh. “I assume in the coming weeks we will have this out of our way.”
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