Borrowing Is Outside the Law for Gulf Laggard Draining Reserves - Bloomberg:
From an unpredictable monetary policy to its noisy domestic politics, Kuwait is often the odd one out in the Gulf.
It boasts the region’s first female finance minister and, uniquely for a Gulf monarchy, has an elected legislature. But acrimony between lawmakers and the appointed government has resulted in eight administrations in as many years, and the fallout on fiscal policy is becoming harder to contain.
Unlike most of its neighbors, OPEC’s fourth-largest producer has failed to introduce taxes after taking a hit from lower oil prices since 2014, earning the moniker of the “slowest reformer” among Gulf Arab economies from Fitch Ratings. For the year starting April 1, AA-rated Kuwait expects to run its biggest-ever budget deficit on anticipation of a decline in oil income and output.
The government’s financing needs “are projected to grow rapidly,” the International Monetary Fund warned last week.
From an unpredictable monetary policy to its noisy domestic politics, Kuwait is often the odd one out in the Gulf.
It boasts the region’s first female finance minister and, uniquely for a Gulf monarchy, has an elected legislature. But acrimony between lawmakers and the appointed government has resulted in eight administrations in as many years, and the fallout on fiscal policy is becoming harder to contain.
Unlike most of its neighbors, OPEC’s fourth-largest producer has failed to introduce taxes after taking a hit from lower oil prices since 2014, earning the moniker of the “slowest reformer” among Gulf Arab economies from Fitch Ratings. For the year starting April 1, AA-rated Kuwait expects to run its biggest-ever budget deficit on anticipation of a decline in oil income and output.
The government’s financing needs “are projected to grow rapidly,” the International Monetary Fund warned last week.
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