Bloomberg Writes that Kuwait Is “Running out of Cash”
OREANDA-NEWS. Bloomberg agency reports that Kuwait, which has the significant oil reserves, was stranded by falling prices for this resource.
The publication notes that this year oil and gas exports from Kuwait will fall to nearly half of 2014 maximum levels. The government has practically exhausted its liquid assets, making it unable to cover the budget deficit which is expected to reach nearly 46 billion US dollars.
In addition, the situation in Kuwait is complicated by the confrontation between the parliament and the government. Lawmakers thwarted cabinet’s plans connected to the redistributing of state subsidies and public debt.
The OPEC has recovered hydrocarbon prices after a historic drop, but 40 dollars per barrel is still too low figure. The coronavirus pandemic and the transition to renewable energy sources threaten to make fuel cheap.90 % of Kuwait’s revenues is still provided by oil production. 80 % of the able-bodied residents of the country work for the state. Salaries and subsidies account for three quarters of government spending.