The Kuwaiti government has warned in its new work program that the oil-rich country is facing an "exceptionally serious challenge," due to fluctuating oil prices and its reliance on public finances as the sole source of income. The program, which Reuters obtained a copy of, indicated that this challenge threatens its ability to continue providing a decent life for citizens and meeting their basic needs, and also jeopardizes the ability to meet local and international obligations.
The program states that the expected budget deficit for the state over the next five years will range between 45 and 60 billion dinars (146.13 to 194.84 billion dollars) without proceeding with economic and financial reforms. The program warned that continued deterioration of financial and economic conditions could result in defaults by individuals, companies, and banks, a "dangerous" rise in unemployment rates, collapse of social services, and degradation of social security.
The document revealed that the government intends to approve laws including liquidity instruments, corporate profit tax, and selective tax during the current legislative term. It also plans to start a feasibility study for a railway link project with Saudi Arabia within one hundred days.
